- The Australian dollar is struggling below the 0.67 level, with repeated rallies fading amid global trade uncertainty.
- Until that barrier is cleared, downside risk remains elevated toward the 0.6550 area.
The Australian dollar continues to look a bit confused at the moment due to the fact that the 0.67 level is acting like a barrier, but at the same time, it's not actually breaking down. That's not a huge surprise to me, and I think it's probably only a matter of time before we see some type of reaction to the 0.67 level that I think is a little bit more meaningful.
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With that being the case, it's probably worth noting that there is a little bit of divergence going on in this pair for some indicators, and that might be worth paying attention to. But I also recognize that one thing that makes this pair a little bit different is that it is heavily reliant on global trade, and that obviously is something that is a bit of a mess at the moment.
0.67 Level Remains the Key Barrier
With that being the case, I believe you have a situation here where you're probably going to continue to see a lot of fading of the rally if you see any signs of hesitation whatsoever. That has, for the most part, been the case for the Australian dollar for several months now, and despite the fact that we've recently seen a pretty strong run to the upside, the reality is it will take a lot of effort to get above that crucial 0.67 level. And as long as that's going to be the case, I think you have to look at this pair with a little bit of suspicion, and a move down to the 0.6550 level seems very likely.
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