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AUD/USD: Slide continues as 1.0039 in sight?

The risk-aversion towards the Australian Dollar that built up in the end of February has sent the AUD/USD back to levels not seen since July 2012. From a fundamental point of view, the decline in demand for higher-yielding currencies and the expectation that the Reserve Bank of Australia is likely to cut interest rates in March are the main drivers of the down drop. The close of the pair at 1.0171 for February is indicating that the minor trend could be turning down, putting the AUD/USD in a position to resume the downside in March. Should the downside momentum continue, the next key support level sits at 1.0039, June’s 2012 lows. At 1.0132 at the time of writing, the bears are targeting 1.008 and 1.006 intraday. In the alternative scenario, a break above 1.0185 could delay the downtrend, but it is hard to imagine this at the moment. There is not much in the way of economic data today, which puts the focus on Tuesday’s RBA interest rate decision.

Dafni Serdari
Market Analyst
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