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PrimeXBT Analyst Kim Chua Sees AUD/USD Poised For Deeper Dive After Breaking Previous Support At $0.74

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After coiling for more than a week, the AUD/USD finally broke the support at $0.74 and looks headed for its next support at $0.73 soon. AUD/USD is looking very weak and could head even lower to retest $0.70 again on the back of renewed lockdowns caused by a resurgence of COVID cases.

Although the number of daily COVID cases in Australia eased from the highest since September 2020 during the weekend, the jump in Victoria’s exposure sites to 280 has forced the AUD/USD prices to head south. 

Other than the virus woes, indecision over the US Federal Reserve’s next moves, amid firmer data and covid concerns, also weighs on the AUD/USD prices due to its risk-barometer status.

With inflation failing to meet expectations at a mere 1.1% annualised against the target of 2-3%, the RBA is far off from dialling back stimulus and may in fact, need to increase stimulus if lockdowns start to slow economic activities further. 

The RBA has already signalled that they will keep stimulus efforts in place until headline Australian inflation returns to its +2-3% target band, which is still a long distance away. The need to continue easing will make the AUD one of the weakest G10 currencies this year. 

Shorting the AUD against currencies with a clear policy divergence, in particular, the NZD, who has turned decidedly hawkish, seems like one of the easiest trades to do for the rest of this year, explains PrimeXBT analyst Kim Chua.

About Kim Chua, PrimeXBT Market Analyst:

Primexbt Analyst Kim Chua
Primexbt Analyst Kim Chua

Kim Chua is an institutional trading specialist with a track record of success that extends across leading banks including Deutsche Bank, China Merchants Bank, and more. Chua later launched a hedge fund that consistently achieved triple-digit returns for seven years. Chua is also an educator at heart who developed her own proprietary trading curriculum to pass her knowledge down to a new generation of analysts. Kim Chua actively follows both traditional and cryptocurrency markets closely and is eager to find future investment and trading opportunities as the two vastly different asset classes begin to converge.