Australian Dollar is overbought, China PMI is now in contraction with Shanghai fully locked down re: COVID out of control and low vaccine rates amongst the elderly. U.S rates now overshooting Australia's cash rate.

 

The Australian Dollar looks overbought with very little fundamentals backing it up.  As noted with Chart above with the  Reserve Bank of Australia cash rate still sitting at 10 basis points or 0.10%, bottom red line while the U.S cash rate at 0.25% (white line) is beginning, in light of out of control inflation in the U.S, starting to rise.  Albeit in small increments.  The blue area chart is the AUD/USD which is bid at 0.75, the green line is the Chinese Non-Manufacturing Purchasing Manager Index (PMI),  that has collapsed under 50 (indicating economic contraction) due to the out of control Covid cases throughout China and if we are to believe Chinese economic statistics, could be way lower than what is presented to the global markets.

The AUD does trail the Chinese PMI, only because it is Western nation that is heavily dependent on Chinese economic expansion, with Covid retuning to China as a vengeance and lower than avenge vaccinated rates of the elderly that defies logic, the AUD divergence from the Chinese PMI could indicate the higher commodity prices are driving the AUD upward.   

Yet, Australia is very vulnerable to external supply chain shocks and interest rate rises.

The AUD is not a safe haven.  Eyes on selling pressure going into May 2022