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Aussie Dollar Chart

Aussie Dollar Chart

I have been watching the Aussie dollar quite closely over the last few months, its staged an impressive rally from 0.715 up to 0.775, however that looks to be topping out. As you can see from the chart below which represents 2016 and 2017, the dollar has failed to breach 0.7750 on a closing basis for 19 weeks over the last 52. Could there be a possible target for 0.715 again?

Looking at a longer term chart from the 2012 highs, this same consolidation pattern happened in 2014-2015. If we can break below 70c this year, I am taking a guess that the Aussie dollar might be heading toward 60c in mid 2018.

Thoughts anyone?

 

| The Speculator

3 Comments

  1. Jack Davis

    Speculator. Loving this analysis. If the AUDUSD becomes weaker then our miners will be back in bullish territory. And that will be the split between US miners and Aussie miners. As long as Gold remains “stable” the AUDUSD will dio the rest.

    Reply
  2. Anonymous

    Hi Speculator,

    On my AUD USD chart i have drawn a down sloping trendline connecting the highs from 04/2013, 07/2014, 09/2014 and most recently 11/2016. The price recently broke above this trendline around the end of Jan this year. The recent selloff this past week has been brutal but it is still holding above this trendline. Has resistance now turned to support? We’ll wait and see.

    The price is also above the 50, 100 and 200 day moving averages, something that the price has only managed to do about 20% of the time in the last 4 years. However, when it was above these 3 moving averages in the past, it always got heavily sold off.

    I think the next few weeks will be crucial in seeing where the AUD USD will likely be headed.

    A likely FOMC hike in March and improving economic data out of the US (unlikely in my opinion, the data improvement on the back of Trump euphoria seems to be fading and we are back into data that is missing consensus) will see the AUD USD move back below the trendline and below the moving averages and ultimately below 0.75.

    Improving economic data and inflation figures out of Australia that may tempt the RBA to adopt a more hawkish tone may see the price move towards 0.80 (this is unlikely in my view as Australia is hanging on to somewhat good economic data by the skin of its teeth as long as households can keep borrowing. As one of the most indebted households in the world, how much longer can this go on for?)

    As hard as it was for us investors to take all of this into account in the past, we are now needing to deal as well with Trump. He says unexpected things at unexpected times that trump any economic data or technical reasoning.

    In summary, if the AUD USD can hold 0.75 throughout the month of March, its most likely headed to 0.80 in my view. A break below 0.75 will but it back in a wedge formation with an upward trendline that has been in play for over 10 years (so extremely important). That indicates resistance is around 0.70.

    So I totally agree with you that if it breaks 0.70, it will most likely end up somewhere in the 60’s sometime in 2018.

    Reply
    • the Speculator

      Thanks for the comment.

      Reply

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