As AUD/USD continues to drive lower there must come a time when it’s safe to go back in the water with longs isn’t there?
At the moment the tech isn’t really important. The fundamental picture is what we need to watch and the play between the Fed and the RBA.
I’ll start with the tech anyway as there are levels that are worth noting.
AUD/USD Monthly chart 17 12 2014
Before we have a go at the 61.8 fib of the 2008 swing at 0.7940we’ve a couple of monthly lows from May/Jun 2010 around 0.8060/80. That’s probably the last decent level before we try for the big 0.80 level.
Shorter term, 0.8200 is looking like providing decent resistance but the more significant area is way up at the old 50.0 fib at 0.8535/40.
AUD/USD H4 chart 17 12 2014
I’m still feeling that most of the fall in the aussie and kiwi are due to the Fed and until the market finally finds out when rate hikes are coming, the downside pressure remains. Once the rate outcome is finally known and accepted will be the time to look for the aussie to stage a bounce. At the moment the RBA are using the momentum to drive the aussie lower. Chances of rate cuts are slim next year but the whispers are going around.
I’m going to be watching this closely early next year as I feel that currencies like this will bounce when the Fed pulls or indicates when they’ll pull the trigger on rate hikes. The market will then have that priced into the US dollar and the downside pressure will lift and we can pay more attention to the aussie fundamentals. In the meantime the 0.80 level is close enough for a short term play over the FOMC dependent on what we get. No major news but a mildly hawkish tone and it may be far enough away to become a stretch point for any USD rally.