As the Australian Dollar has been quite bullish those past few months on the FX markets, let’s have a brief look at the main Aussie-related currency pairs: AUD/USD of course, but also AUD/JPY, AUD/GBP and AUD/NZD.
AUD/GBP: an important level has just been reached. It is actually a new historical high as the pair rose to 0.5349 (point B on the monthly chart). The previous high above 0.53 had been posted in May 1996 (point A). This could create an immediate resistance and generate a “double-top” technical pattern. A trend reversal may be expected then, especially as the AUD/GBP has been rising by 45% during the last 12 months (between points C and B).
AUD/USD: the pair has crossed above the resistance set at 0.85. This is a bullish signal. This breakout is likely to open the door towards 0.90, the next potential resistance level. After a short-term high posted at 0.8775 last week (point B), the price action is currently correcting slightly. It may test the previous resistance as the new support line, which is a typical move after a breakout.
AUD/NZD: the pair remains capped at 1.295, a level reached several times during the last 15 months (points A, B and C) which holds firmly. Since late April this year, the AUD/NZD is on a medium-term bearish trend as the price action has been posting regular lower highs (points G, H, I and J). The objective on the downside is 1.205, where the price action found some strong support (points E and F) several months ago.
AUD/JPY: after a strong rebound generated in early February, which resulted from a “double-bottom” (points A and B), the price action is now capped around 85 (point C). From the low below 57 posted in January this year, it is 49% higher. Now the resistance at 85 corresponds to a previous low (point D) posted one year ago. It should remain the new high as the medium-term momentum is weakening (the MACD has posted several lower highs).
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Thanks for that, Ciao. Hmmm……….. the undercurrents we don’t see!!!
Ciao, I forgot to ask, did the NZ govt also extend guarantees to the banks, like we have sen here in Oz? If they have, will this protect the banks in the disaster you are envisaging? Why/Why not?
Anyhow, you reckon that Aussie banks will be king hit if NZ house prices crash? A price crash, as determined by sales at the margins, does not by itself imply a hit to bank balance sheets. There would have to be mass defaults and foreclosures and big losses taken on foreclosed home sales to really get the banks into trouble. And if the NZ economy is recovering, then people should be able to maintain payments, even if volume dries up because there are few buyers. Do you agree, or am I missing something?
Unemployment is rsing much faster than any figures show. How can that be? Its the way the figures are calculated. If you are on the Dole and do 2 hours work then your not an unemployment statistic -no the figures DONT come from Centrelink. Some part time work means your employed in the ABS mindset. So if most of the employment growth in the 90s was part time then as this shrinks fast no appreciable reults will be shown on the ABS stats -let me give a hyperthetical example. If two million Australians are doing an average of 28 hours a week work part time and then that drops to three hours of work a week (yes they would be getting big dole payements at that level) then the unemployment stats dont change a bit. Look I am not doing it justice -just google and Australian search of the words “hidden unemployment” and the full article from acoss will appear. Look I am not endorcing them but the reading on how they rig these stats is just mind blowing. If unemployment is soaring upwards and its not showing (because of loss of part time work) on the ABS figures it means the ability for people to pay for food, goods and more importantly rent and mortgages is dropping fast. Its going to catch up with us soon guys.
Yes, leo, I’m afraid you are right. There is a lot of smoke and mirrors with the numbers. You cannot trust ANY of them, GDP, CPI, Unemployment, you name it; they are all doctored and tortured to hide the ugly reality. This has a couple of side effects. On the “good” side, it makes politicians and powers that be look better. But at what cost? At the cost of the rest of us who are trying to make rational calculations by relying of those numbers, miscalculating on account of getting a false picture of what in fact is happening. Plus, all the payments that are tied to various figures, such as the CPI, are continuously short changing the recipients. Ah, this is too much………
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