The Aussie dollar has come under pressure over the past year, falling more than 20% from this time in 2014 to around 0.7150 this morning.
The fall has been closely related to that in commodity prices, a reappraisal of Australia’s growth prospects, interest rate spreads, and concerns about Chinese and global growth.
But traders also buy and sell currencies on the back of technical indicators, both short and long term.
That makes this chart of the Aussie dollar crucial to the long term outlook for the currency and just how far and how fast the widely expected move below the 70 cent level occurs:
These are very long term charts, and this trendline goes back to the lows in 2001. But, as we saw recently with oil’s break of the trendline that supported it for more than a decade, and precipitated a wave of selling, traders do watch these levels.
That means the Aussie dollar needs to hold above 71 cents for the August close at 5pm New York tonight (7am AEST) to help stave off a wave of selling.