AUD/USD May Suffer Deeper Losses

WikiFX News (24 Sept) -Recently, AUD/USD traded to a fresh monthly low of 0.7128 with sharp gains in the US dollar and a decline in global stocks. The exchange rate may test the August low of 0.7076 as the Reserve Bank of Australia (RBA) was determined to provide additional policy stimulus.

The RBA warned that “under the central scenario, it would be more than three years before sufficient progress was being made towards full employment to be confident that inflation will be sustainably within the target band.” The RBA will take further steps to support the economy, which includes expanding the yield target program, intervening in forex markets, and launching a negative interest rate policy. A further shift in risk sentiment may keep the exchange rate under pressure.

The IG Client Sentiment Report shows the number of net-long and net-short AUD/USD traders is 2.93% and 12.48% lower from last week, respectively. But the selloff of AUD/USD looks poised to persist as retail traders have been net-short the pair since April. The exchange rate appears to be on track to test the August low of 0.7076, considering the losses in the exchange rate deepened from earlier this week.

All the above is provided by WikiFX, a platform world-renowned for foreign exchange information. For details, please download the WikiFX App: bit.ly/WIKIFX

Chart: IG Client Sentiment