The AUD is the weakest currency pair today
The AUD is the weakest of the major currencies today and the run lower continues. The pair just reached a new session low at 0.67046. That is the lowest level since October 3 when the price dipped to 0.6702.
The pair has been trending to the downside as traders increase the chance a rate cut by the reserve Bank of Australia. Currently the market is pricing in a 15% cut in February. That increases to near 44% in March.
The coronavirus is another risk for the economy. That comes on the back of the fires that ravaged the country.
Technically, the pair is moving closer to the floor area defined by lows going back to August 2019. Looking at the daily chart above, those lows extended down to 0.66714 and up to 0.66887. Moving below those levels would increase the bearish bias.
Drilling to the hourly chart below, the pair is testing a lower trend line connecting lows from January 15 and lows from Tuesday's trading.
Risk defining traders looking to take some profit or buy a dip, may lean against that level, with stops on a move below.
If the level holds, the dip buyers with like see the price move back above the swing lows from yesterday and on Tuesday at 0.6735-37. A topside trend line is also moving down toward that level as well.
The fundamental story is more bearish (and there should be sellers on rebounds), but technically, there is a reason to buy against a lower trendline and the 0.6700 natural support level with limited risk.