World's Forex Traders Shock Over AUD

Did you know that AUD/USD is the fourth most traded currency pair in the world? Since our last update, the pair has fallen through a multi-year support level which is sending shockwaves through the trading world.

The forex market is arguably the world's largest, with 15 trillion US Dollars per day moving through it. With the AUD being such a popular trade, what might now happen as the world looks at this technical sell opportunity?

Price Levels

Yesterday, the currency pair hit 0.6131, which is the lowest level since April 2020. That was the midst of the market crash. The news has now attracted the eyes of global analysts and writers.

The daily chart support level of roughly 0.62 has been broken, leaving technical buyers gasping at the currency's future. Although there was a slight bounce back yesterday, it still may face the 62-cent level as a support-turned-resistance.

Why is AUD/USD so Popular?

Our country is about the size of two big cities, from a population perspective. So why does the rest of the world pile into buying our currency (or shorting it aggressively)?

One of the main reasons is that Australia is classed as a stable country. Despite being so small, we do not typically have civil wars, famines, foreign invasions, or issues that many other countries go through. On the contrary, we have seemingly unlimited natural resources which the world's superpowers desperately need. The Lucky Country is lucky indeed.

The downside comes when there is fear in global markets. The AUD/USD typically performs badly on the back of a poor Chinese and US economy, or any fears about them becoming worse. That's when being the fourth most popular currency can make it have a large bullseye on its head for global speculators.

The good news from this is that Australian gold buyers have pulled off one of the most successful hedges. By banking on market fears, they swapped their risk currency for a safe haven asset and turned a negative into an amazing investment.

News to Watch

On Thursday there will be two announcements that could be make or break. The U.S. CPI data, or inflation numbers, could greatly affect the strength of the USD. Following that release comes the employment data from Australia. The world will be watching these news releases to see if the Australian Dollar has a fighting chance to overcome what looks like a significant downfall from a technical perspective.