The Australian dollar continues to see a lot of noise in the forex markets, as we are getting close to the bottom of the overall range. This market is one that range traders will be very interested in, as the markets are looking at commodity markets.
AUD/USD
The Aussie dollar looks like it is trying to find its footing here near the 0.6950 level, an area that has been important and that I think extends down to the 0.6850 level of support, demand, etc.
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The bounce is worth noting, though, because interest rates in America have been climbing during the session, so it almost looks like we are ignoring that, at least in this currency pair. The stochastic oscillator has crossed in oversold conditions, so from a technical analysis standpoint, that does hold a certain bit of water.
RBA
The Reserve Bank of Australia is going to be a little bit more hawkish than most central banks. At the same time, the Federal Reserve in the United States is looking to raise rates, but bets on rates being raised in October have dropped to about 22% this morning, while most are expecting a hike in December. The soft jobs number certainly put some questions out there.
We have seen some data recently miss in America, although we saw this once or twice before and then saw it come screaming back, so I think there is a little bit of caution here. Nonetheless, with demand for certain commodities—copper, iron, gold—Australia does have a little bit of a cushion.
So, at this point in time, buyers might be returning to play the overall range, which seems to be from the 0.6850 level at the very bottom to the 0.7250 level at the very top. Range-bound traders, perk up. This could be your place.
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