AUDUSD traded higher as risk assets roared back and the US Fed set the tone for a coordinated central bank response to the COVID-19 crisis. This took away the pressure of a widely expected RBA rate cut of 0.25% at the conclusion of their policy meet today. Prior to that, the Aussie was under tremendous pressure as markets sold off risk with the coronavirus spreading far and fast around the globe. Yesterday, China’s Caixin Manufacturing PMI in February slumped to 40.3 against forecasts of 46.1 and January’s 51.1.
The Aussie was knocked down to an overnight and fresh 11-year low at 0.64338 over the weekend. AUD/USD hit an overnight low at 0.64629 against the overall weaker US Dollar following Jerome Powell’s statement that the Fed would “act as appropriate” to support the economy. AUD/USD jumped to an overnight high at 0.65679 before easing to close at 0.6535 in New York.
The latest Commitment of Traders report saw total net speculative AUD short bets increase (week ended Feb 25) to -AUD 43,832 contracts from the previous week’s -AUD 37,477. This will keep the Battler supported on any dips now below 0.65 cents.

An RBA rate cut of 0.25%, as widely expected will see AUD/USD hold 0.65 cents, rallying to immediate resistance at 0.6570. The next resistance level lies at 0.66 cents. A rate cut of 0.5%, highly unlikely would see 0.6465, and then 0.6430 tested. In the more medium term, an overall weaker US Dollar will result in a stronger Aussie. Look to buy dips, but pick your levels well.
There is a risk of no change in rates as well. AUD/USD would rocket to test 0.6600 first, followed by 0.6640. You gotta love this currency. “Let’s get ready to rumble”.