Aussie remains pressured by negative press – critical support

Over the last few days, quite a few negative articles for the Australian economy and the Aussie dollar have appeared. This keeps the pressure on AUD/USD, and limits every bounce.

Here are a few recent quotes:

• Warning – derelict economy ahead – News.com.au: If the headline doesn’t speak for itself, here is the first paragraph, which shouts it all out:
  

THE Australian economy is heading for a potentially catastrophic collapse from a devastating squeeze between a sudden and dramatic drop in demand for our major resource exports and a crippling increase in the cost of new projects

• Australian dollar vs Syrian pound for worst-performing currency – The Australian / Wall Street Journal. Comparing the A$ to the Syrian pound is a bit harsh. Syria is in a civil war for over two years.
• Hedge funds bet on Aussie dollar slide – Reuters. The article brings some gloomy quotes. These join the recent negative COT data. Here is a taste:
  

  “We think the Australian dollar will come down and come down hard,” said Stanley Druckenmiller …  this is the end of the big supercycle in commodities that started 10 years ago,
  In the short term Australian banks are a danger zone,” said Toscafund founder Martin Hughes, one of the UK’s top investors. “Things are not as benign as the market is implying.”

• Aussie May Slide to 19-Month Low After Pause – Bloomberg. The article quote some technical analysts that see more falls. Here is a quote:
  

  The Australian dollar may fall to its lowest level in more than 19 months if it continues a weakening trend and breaches a key support level, according to Credit Suisse AG, citing technical indicators

AUD/USD has stabilized above the critical support line of 0.9580 seen in June 2012. However, as aforementioned, after an initial big bounce, the following ones have been more shallow.

The pair could certainly continue falling with all this pressure.

More about the collapse of the Australian dollar:

• AUD/USD Set to Fall to 0.60?  – FX Concept’s John Taylor thinks so.
• Aussie presents a total collapse: a look at 5 Aussie pairs  – The Aussie also collapsed against other currencies, and lost some big levels.
• Forex Analysis: AUD/USD Continues Dramatic Plunge to Establish New Lows  – Technical analysis by James Chen.
• AUDUSD Bearish; Wait On Pull-back For New Shorts  – Elliott Wave Analysis

And of course, the weekly AUD/USD forecast.