Okay, so I know I am tempting fate with that headline.
But after an overnight low of 0.7325 the Aussie dollar is sitting a little higher 0.7341 but looking pressured as that perfect storm of factors I've written about over previous weeks builds and intensifies.
To reiterate the various drivers of the Aussie dollar that I use in my process of evaluating where it's headed are all pointing lower now.
Take for example investor risk appetite which is getting crushed right now as US stocks join the Chinese selling. Throw in USD strength, the outlook for the Australian and global economies (relative to expectations a few months back), the RBA outlook versus the Fed, the bond spread with the US, the collapse of copper and drift in other important Australian commodities, and you end up with an outlook which is negative for the Aussie dollar.
In many ways I'd argue that Aussie is actually outperforming itself in holding up here above 73 cents. A big part of that is of course the fact the Euro is holding above 1.15.
Yet the Aussie is at risk isn't it? If the Chinese don't step in to support the Yuan or its stock markets today then there is every chance - given the S&P 500 closed on its lows - that risk assets have another bad 24 hours ahead and the Aussie comes under further pressure.
Price action wise the break of the recent low, after the recent bounce now targets 0.7219 as a 138.2% Fibonacci projection of the most recent down leg. And then, of course, I have my medium-term target in the 0.7125/50 region.
Have a great day's trading.
Chief Market Strategist
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Ongoing rate curve repricing and risk asset reaction perfectly illustrate how worryingly reliant investors have become on easy money policies