After all, picking up “cheap US dollars” will probably continue to be the same trade that works for you as it has over the last several months.
Because of this, I think we continue to see plenty of downward trajectory in this pair, and probably the Australian dollar against almost everything else. This is especially true in the AUD/NZD pair, as the Royal Bank of New Zealand rose interest rates 50 basis points the very next day. This is mainly because the Australian economy is so highly levered to its own housing market that higher interest rates are very toxic in this environment. Because of this, I think at this point you will continue to see this market be very volatile and negative, and therefore I think the currency markets will be pricing in a very loose RBA.
On the upside, the 0.64 level now looks to be potential resistance as it was previous support. Based upon “market memory”, there should be plenty of people interested in that area. After that, we start to look toward the 0.6530 level, and then eventually the 0.67 level that was so important for so long.
I think at this point, breaking above that could really shock the markets, but right now it looks like anytime we rally there should be plenty of sellers looking to take advantage of the slightest hint of exhaustion. After all, picking up “cheap US dollars” will probably continue to be the same trade that works for you as it has over the last several months. This is especially true against the Australian dollar after the RBA pulled back a bit from its aggressive stance against inflation. Because of this, I think the Australian dollar continues to fall against most things, especially the US dollar.