The Australian dollar is easily the laggard today.
Stevens’ successful rant against the Australian dollar overnight proves that jawboning only works when the conditions are right:
The thing about jawboning is that it tends to work best when you’re swimming with the current. The recent uptrend in AUD/USD has broken and harsh words from Stevens about the Aussie dollar could fall on sympathetic ears.
The meat of his speech wasn’t anything particularly insightful. He talks about a falling AUD on terms of trade but what he doesn’t mention is a US dollar that’s falling even faster on the Fed’s Printapalooza.
Ultimately, I think this is a dip to buy but given the size of the decline today and the looming Fed, this isn’t the time to pick a fight. With the uptrend and Sept high broken, the next level on my chart is the 61.8% retracement of the October rally at 0.9495 — and that doesn’t look like the sturdiest level of support.
AUDUSD daily
On the border board, strong bids at 0.9480 are holding the line while more are at 0.9450 with stops below.
