After several failed attempts in the past few months, AUD/USD finally made a convincing break below the 1.0200 major psychological level in yesterday’s trading.
The recent RBA interest rate cut may have been one of the major factors driving the selloff, although the pair did draw a bit of support from strong Australian jobs data released this week. However, the rally didn’t last and AUD/USD soon found itself below 1.0200 and even 1.0100 in today’s Asian session.
This could be a signal that a longer-term downtrend is set to take place for AUD/USD. Remember that the previous range was roughly 400 pips in height as the pair found resistance at 1.0600 and support at 1.0200 in the past. This suggests that the breakdown could be of the same height, taking the pair below parity later on.
By Kate Curtis from Trader’s Way