"The fundamental reason for Australia's problems is China and the rotten time that commodities have had since February as a result."
— Simon Derrick, Bank of New York Mellon (based on Reuters)
Pair's Outlook
The weakening commodity prices and strong Greenback are pushing the Aussie towards its 3-month low near 0.7478. The hourly chart shows the pair following the lower Bollinger band for the first half of this trading day, demonstrating that there is still some downside potential until 0.7473. This level coincides with the lower Bollinger band in the daily timeframe. In contrast, the pair may decrease its downside momentum, closing near the monthly and weekly S1s at 0.7500/0.7490. Technical indicators, however, remain bearish, suggesting that the sideways momentum guiding the pair since mid-January might be finally turned in bears' favour.
Traders' Sentiment
Market sentiment remains unchanged, as 52% of open positions are short. Meanwhile, 60% of set up orders are to buy the Aussie.
© Dukascopy Bank SA