Have we seen the near-18-year lows at US$0.5500 for the Australian Dollar as Australia begins shutdown?

March 23, 2020 - 2 weeks ago
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As the financial markets brace for another whirlwind of market volatility, on Sunday evening, PM Scott Morrison government inject A$66.4 billion into the economy to counter the economic impact of the coronavirus pandemic.

The government will provide A$25.2 billion in support to businesses and not-for-profit charities while also offer support to small businesses.

On Thursday, the Australian Dollar rollercoaster ride hit many twists and turns, followed by a heavy tumble and plummeted to a fresh near 18-year low of US$0.5507, before staging a modest bounce and hit an intraday high of US$0.5985 on Friday.

Last Thursday, the Reserve Bank of Australia (RBA) announced an unscheduled emergency meeting and cut its cash rate by a further 25 basis points after already doing so at its regular meeting at the beginning of March.

Thursday’s cut takes the cash rate to 0.25% and potentially, for now, is the RBA’s last cut for the meantime having recently flagged that it would not lower the cash rate below this threshold.

From the technical assessment, with the critical upside target reached at US$0.5950-65 on Friday, now shifts the attention back to the near 18-year lows at US$0.5500-10 which is seen crucial as beneath here exposes the region of US$0.5375-85.

Due to the high volatility, and whip-saw price action, renewed upside attempts are expected to fail towards the critical resistance is located at US$0.5950-US$0.6000.

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