31 Oct 2013
Flash: AUD/USD looking to test 0.9280 by mid-November - ANZ
FXstreet.com (Barcelona) - The sharpness of the decline after the spike to 0.9760, suggests to Tim Riddell, Head of FX Reserch at ANZ, that the upward bias in the AUD/USD may have run their course, which could result in equally sharp sharp falls.
Key Quotes
"The push through the initial peak of 0.9530 triggered a sound test of 0.9720 (50% of the fall seen since April). However, the sharp slide from 0.9760 resulted in a negative-outside-day, and a notable turn in daily momentum indicators."
"This resultant AUD slide is now threatening tight rising support (dashed blue trend line in Figure 2) at 0.9580. Not only does this throw doubt on the AUD’s ability to extend the uptrend for measured targets of 0.9820 and 0.9920, it also highlights the risk of ‘reversal’ retracements to the downside."
"Consequently, a close below 0.9580/0.9520 (confirmed) could flip the profile towards downside retracements to test 0.9280 into mid-November. A close back above 0.9670 would be needed to reduce this flip towards AUD downside risks."
Key Quotes
"The push through the initial peak of 0.9530 triggered a sound test of 0.9720 (50% of the fall seen since April). However, the sharp slide from 0.9760 resulted in a negative-outside-day, and a notable turn in daily momentum indicators."
"This resultant AUD slide is now threatening tight rising support (dashed blue trend line in Figure 2) at 0.9580. Not only does this throw doubt on the AUD’s ability to extend the uptrend for measured targets of 0.9820 and 0.9920, it also highlights the risk of ‘reversal’ retracements to the downside."
"Consequently, a close below 0.9580/0.9520 (confirmed) could flip the profile towards downside retracements to test 0.9280 into mid-November. A close back above 0.9670 would be needed to reduce this flip towards AUD downside risks."