AUD/USD moves to a low of 0.7105 on the day
Price now closes in on support near the 0.7100 handle as the aussie remains pressured following news that NAB has increased a number of its home loan interest rates earlier. From the daily chart, price is looking to hold a break below the 23.6 retracement level@ 0.7118 and further support is then seen around 0.7085 after the figure handle.
At the moment, the aussie doesn't have much going for it as markets got a timely reminder that the RBA is still nowhere near able to hike rates; they almost certainly won't be able to do so as well this year. And with risk sentiment not exactly beaming with confidence/assurance, it's hard for risk assets to pull off a sustainable rally in this environment.
The hourly chart also shows that the near-term bias now favours sellers after price failed to hold a break above the 100-hour MA (red line) earlier.
However, the bright side for buyers is that the story here isn't new. NAB is the last of the "Big Four" to raise its mortgage rate in a cycle that began last August. In any case, markets aren't expecting anything from the RBA as well this year. That said, the worry is that funding costs will continue to rise and pile further pressure on the central bank as financial houses continue to put more strain on consumers by raising their lending rates.
There are reasons to still be bearish on the aussie at this point and a break of the 0.7100 handle will give sellers more confidence in a move towards the downside. But I'm finding it tough to argue for a drop beyond the 0.7000 handle against the greenback in the near-term, since a lot of the negative factors have already been known over the past few months.
