1 Aug 2013
AUD/USD smashed, target at 0.8860 eyed
FXstreet.com (Barcelona) - The AUD/USD debacle after a clean break through 0.90 formidable support is happening right after our eyes, with the rate tumbling marginally below Wednesday's low at 0.8940 in thin markets.
Break of 0.90 - all hell breaks loose?
As mentioned yesterday by Alp Kocak, Strategist at DailyForex.com: "Simply put, if the pair can get a daily close below 0.90, it may absolutely crater. In fact, this could be one of the better trades for the month of August, and possibly even the rest of the year", adding that "I will not be shorting this until we get a daily close below 0.90, but when we do I will be all in."
The scenario dared by many 0.90 defenders is now manifesting, after the AUD/USD posted a daily close post NY market at 0.8978, all occurring amid a 'dovish' Fed, making the fall in the rate all more relevant, as the Aussie no longer finds support even from an indecisive Fed. However, this should be no much of a surprise, as we have been quite vocal on underlying China and the RBA as the two main drivers of the AUD/USD price action in recent times.
As written earlier this week: "The reality is that even as the market has been 'pricing out' the 'Septaper', the AUD/USD has failed to break through the impregnable 0.93, thus suggesting that the Fed is perhaps, surprisingly, the element weighing the least out of the three on the AUD/USD value."
AUD/USD technical analysis
In terms of technical levels to pay most attention, according to Richard Sexton from IFR Markets, "long term channel line lies just below - at about 0.886, expect this channel to be tested ." On the upside, since 0.9008 has been well protected- note the relationship built with the 20-day MA on the hourly - it suggests that 0.9010 - stop sensitive area - along with 0.9045 - sequence of highs pre U.S. GDP, more stops expected above 0.9050 then - are the key upside hurdles.
Break of 0.90 - all hell breaks loose?
As mentioned yesterday by Alp Kocak, Strategist at DailyForex.com: "Simply put, if the pair can get a daily close below 0.90, it may absolutely crater. In fact, this could be one of the better trades for the month of August, and possibly even the rest of the year", adding that "I will not be shorting this until we get a daily close below 0.90, but when we do I will be all in."
The scenario dared by many 0.90 defenders is now manifesting, after the AUD/USD posted a daily close post NY market at 0.8978, all occurring amid a 'dovish' Fed, making the fall in the rate all more relevant, as the Aussie no longer finds support even from an indecisive Fed. However, this should be no much of a surprise, as we have been quite vocal on underlying China and the RBA as the two main drivers of the AUD/USD price action in recent times.
As written earlier this week: "The reality is that even as the market has been 'pricing out' the 'Septaper', the AUD/USD has failed to break through the impregnable 0.93, thus suggesting that the Fed is perhaps, surprisingly, the element weighing the least out of the three on the AUD/USD value."
AUD/USD technical analysis
In terms of technical levels to pay most attention, according to Richard Sexton from IFR Markets, "long term channel line lies just below - at about 0.886, expect this channel to be tested ." On the upside, since 0.9008 has been well protected- note the relationship built with the 20-day MA on the hourly - it suggests that 0.9010 - stop sensitive area - along with 0.9045 - sequence of highs pre U.S. GDP, more stops expected above 0.9050 then - are the key upside hurdles.