The Aussie Battler reversed its impressive gains this week dropping back to the mid-60 level after climbing briefly above 0.62 cents (0.62138) yesterday. AUD/USD finished 0.94% lower at 0.6077 in New York from yesterday’s 0.6145 Asia open. The Australian Dollar traded to an overnight high at 0.6185 before the rampaging Dollar against Asian and EM currencies took its toll on the Battler. We noted that often, in the past, the Australian Dollar’s “risk” label was influenced by the level of the Asian currencies. Having traded in the 1997 Asian currency crisis, this was a big lesson to all Australian Dollar traders including yours truly. The Asian currencies were tanking all over the place and the AUD/USD stayed steady. Not for long. Ever since then, the Asian currencies have impacted the Aussie. Not always in the same manner, at times highly correlated, other times, minimal. But the impact is there.
AUD/USD lifted after better Chinese PMI reports were shrugged off by Aussie traders. While Chinese data were impressive, they were coming off an extremely low base and economic activity is far from normal. AUD/USD has spent the last two weeks of March rebounding off it’s 2002 lows. We may have seen a short-term top around that 0.6200 area. Traders will look to the US data to gauge the next direction for the Battler. Immediate resistance lies at 0.6110 followed by 0.6170. Immediate support can be found at 0.6040 (overnight low 0.60387) followed by 0.6000. Look for a choppy trading session likely between 0.6020-0.6180. Just trade the range shag on this puppy today.