The Aussie dollar hit a low in January of around 0.8660 amid much expectation that it was headed further south across the course of 2014.
Since then however it has been on a very strong uptrend, confounding currency market experts, the RBA and its governor, Glenn Stevens by trading as high as 0.9460 in early April.
This morning however the Aussie dollar has traded down to retest this uptrend at a low of 0.9225 before rallying a little to sit at 0.9237 a short time ago.
Some traders are expecting this recent weakness to continue and the uptrend from January to break.
Business Insider spoke to Sean Lee from FXWW.com, a network of professional traders in the interbank and hedge fund markets, about where he though the Aussie dollar might go in the near term.
Lee said the market is becoming too bearish (expecting a fall) with around 80% of retail traders bearish at the moment. Likewise he felt hedge funds and investment house traders were also short, positioned for a fall in the Aussie dollar.
This means that while the Aussie dollar could fall a little further, Lee thought it would “base now near 91 cents” before it would then rally back to 98 cents.
Support below 92 cents is in line with the view that Westpac put out late last week which could indicate the Aussie dollar’s recent pullback might be nearing an end – technical traders will however continue to watch this trendline.