The AUDUSD continues its momentous decline as the pair keeps breaking lows. This has occurred amidst a Chinese credit crunch, a decline in the previously booming mining sector due to decreased Chinese demand, and a sharp fall in global commodity prices this year. Just two months ago, the AUDUSD was trading around $1.0300 and now the pair is a tremendous 1200 pips below that level.
AUDUSD 1-hour Chart: June 28, 2013
Charts Created using Marketscope – prepared by Kevin Jin
The above chart shows the velocity of the decline, which was recently catalyzed by unexpectedly hawkish Fed commentary on June 19. Trading took the pair as low as .9132 around 14:00 GMT before the pair rebounded about 40 pips higher to .9170 where it stands at the time of writing. The Australian fundamentals are certainly worrying and investors will see how the Reserve Bank of Australia (RBA) handles these issues when the RBA meets next Tuesday.
--- Written by Kevin Jin, DailyFX Research