The AUD/USD pair fell during most of the session on Wednesday, but bounced in order to form a hammer at the end of the day. This does suggest that perhaps the 1.03 level will act as support going forward. With the Federal Reserve printing money the way it is, it isn’t hard to imagine why the Australian dollar would continue to bounce from the support levels.
However, we think in the long run the Australian dollar may actually break well below the 1.03 level as it is scheduled to see at least one rate cuts in its name, and possibly two. With this in mind, we think that the New Zealand dollar will continue to outperform the Australian dollar, and as such if we want to play a commodity currency – we will do it over in that market.
Written by FX Empire