80.00 Might Mark the Top in the AUD/USD
Rowan Crosby • 1 min read
The AUD/USD has been on a tear in recent weeks. In the same fashion as both the Kiwi and Loonie, the commodity currencies have really turned a corner. Of course, a very weak USD certainly hasn’t hurt.
However, now the AUD/USD finds itself in a familiar position. Trying to test 80 cents.
This has been somewhat of a mental roof for the Aussie over a long period of time. The RBA certainly doesn’t want to see us trading at these lofty heights. For the most part, the Australian economy is an export economy, meaning they derive a large portion of their profits (GDP) from commodities.
A higher dollar means that they get less for their money. As such politicians and the Reserve Bank would prefer to see a lower number. Generally, the RBA spend a great deal of time jawboning the Aussie lower.
With that in mind, I suspect we won’t push too far above the 80 cent mark. In the most recent run-up to these levels, we saw 81 get tested. That might be a good point to look at for now as we really don’t want to be stepping in front of a train. Which is feels like we are with the USD so strong.
I am more than happy to be short in the 80-81 cent range. The first thing we need to wait on is a bottom in the US Dollar Index (DXY). If we can bottom out at 90.00 then we can look at being short from 80-81.