The Aussie Battler stayed extremely resilient to the ongoing geopolitical turmoil, skyrocketing to 0.68034 overnight and January 17 highs before easing to settle at 0.6795. Trade tensions between Australia and China increased with speculation that China is planning to impose an import ban on Australian coal. The elevated confrontation between Washington and Beijing will cap the Aussie’s resilience. The recovery in the Aussie has been remarkable, the currency was trading near 0.64 cents in mid-May. Earlier gains in the currency were due to speculative short covering as the AUD/USD pair soared above the 0.66 cent level. Above 0.68 cents will be difficult to justify with anything beyond likened to being “blinded by the light.”
The RBA today is widely expected to keep its current monetary policy unchanged.
AUD/USD has immediate resistance at 0.6820 followed by 0.6550. Immediate support lies at 0.6740 followed by 0.6690. Look for a likely trading range today between 0.6680 and 0.6820. Shut your eyes and sell rallies, don’t allow yourself to be “blinded by the light.”