The AUD/USD pair fell during the session on Monday as the 1.04 level has given way. The market appears like it is one seems to accelerate to the downside, but the 1.03 level should provide some type of supportive bounce at this point. We have broken down below the bottom of an up trending channel, and as such we are suddenly finding ourselves bearish of the Australian dollar.
During the early hours of the Monday session, China announced a large stimulus plan in order to pump the economy of from a confidence standpoint. It appears that the announcement has backfired, as it shows that the Chinese seem to be more concerned about the economic slowdown in that country than what was previously suggested. Because of this, there are concerns as to whether or not the Chinese can continue to buy so many of Australia’s natural resources.
On a break down below the 1.03 level, we would be very short of this pair aiming for parity. As for buying, we are not interested at the moment as we are already short with a small position.
Written by FX Empire