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Aussie Dollar Is Now Oversold

ByNicholas Santiago
Published 05/16/2013, 12:18 AM
Updated 07/09/2023, 06:31 AM

Recently, the Australian Dollar has been a very weak currency. Australia is a commodity rich country and as we all know, most commodities have been declining sharply lower in 2013. Traders and investors should note that the U.S. Dollar Index has been rallying sharply since early February 2013. A stronger U.S. Dollar Index hurts commodity prices since they are inflationary.

Last week, the Reserve Bank of Australia lowered their key interest rate by 25 basis points to a record-low 2.75%. That rate cut has also put pressure on the Australian Dollar. Many economists are expecting further rate cuts in the future. After all, almost every country in the world is racing to devalue their currency in effort to help boost their exports. Japan has implemented a weak Japanese Yen policy, this has helped to lift their stock market higher by nearly 80.0 percent since November 2012.

Technically speaking, the AUD/USD is oversold on the daily charts. Traders should now watch for a short term bounce off of the 0.9868 level. Should this level break on a weekly chart basis, the AUD/USD could decline into the 0.896 support level. Traders should watch the daily and weekly charts for this bearish action to occur and confirm the impending sell to the previously mentioned level. Learn to read the charts, once you do so you will be able to locate the exact spots where the big money players will be entering and exiting the markets. That knowledge will enable you to profit from the larger moves in the markets and earn massive gains. This is a traders market right now, and will remain so for some time. Take advantage of it now.
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