AUD/USD has fallen around 500 pips in the past week on poor Chinese factory output data. Asian stocks followed suit. The bearish Chinese data has added to worries about a 40-percent slide in iron ore prices this year and further soured sentiment for commodity currencies. Not surprisingly, the Australian dollar was a notable underperformer, dipping below 90 U.S. cents (AUD=D4) for the first time since March and extending a decline from 94 cents early this month.
Now you can see from the above AUD/USD H4 chart, that the fall has been pretty sharp. AUD/USD will fall more. As a currency trader, you should keep an eye on the fundamentals. It is the fundamentals that drive the market. If you trade AUD/USD, you should understand what drives this commodity currency. Right now AUD/USD is feeling the pressure from poor Chinese Factory Output data. It’s shaping up to be another tough week for the Australian dollar. AUDUSD is falling under the weight of disappointing Chinese economic data, strong US economic data, and softening commodity prices. The commodity currency has also had a target on its back for a long time, thus there’s no shortage of bears waiting to attack.