The Aussie dollar has now broken below its six-month trading range and has just broken what is an important level to traders – the 200-day moving average.
Currently at 0.9161, the Aussie is more than 30 points off the high from an hour or two back and while seeming resistant to the weak consumer sentiment early, it’s clear that sentiment is now souring.
This is a big deal because in simultaneously breaking the range and also the moving average, the Aussie dollar – which most traders viewed favourable until the last 24 hours – will have signaled to the bears that it is time to sell.
As iron ore tanks and the economy looks like it’s faltering, it would not be a surprise to see many traders and investors who hitherto saw Australia as an easy bet reduce positions and add to the selling.
Glenn Stevens will be quietly smiling up in Martin Place.