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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Come on guys, the pound is stuffed, the US dollar a shadow of its past glory, the NZ$ is insignificant. How are we doing against the Yuan?
PF, looking at these charts, I cannot quite figure out whether it is the red lines, or the blue lines, that offer more support and/or resistance for future price movements. I think I might need some help. Can you help me out, here?!!! Or should that be out of here?, lol.
What about the Euro
What a great name you have, Cosmic Charade.
Yes, what about it?
Jack Crooks and his chief assistant, whose contrarian predictive powers during the panic seemed supernatural, have been since run over by virtually all the currency trains, and especially the Euro’s. Man, this crisis has made fools at one time or another of practically everyone, except, perhaps, Marc Faber. His flag, I think, still flies high.
cb – your asking the wrong guy, I consider the technical support levels and technical barriers that chartists dream up to be a bit like emporers consulting astrologists before a battle.
I’ll stick to tea leaves.
Must go – a new bottle of red wine awaits, so I’ll go and make an offering to the Gods.
lol, PF, did you miss me same view in question?
But, I agree, each to his own: MM to red lines, you to tea leaves, me to coffee grind, haha. But none of those will compete with a proven sacrifice like that to please the gods.
Bacchus is all powerful.
The NZD can easily bankrupt 3 of our 4 pillars when the deflation hits. 1 is now even trying to float their subsidiary. Think of that as you eat your lamb chop because it might get cheaper. NZ was APRA’s banking casino, a total regulatory risk disgrace and they knew it many years ago, mentioned it in their annual reports , and did absolutely nothing about it!
Hmmm……, Ciao, I will not pretend to understand half of what you are saying, but would like to, if you would be so kind to explain.
One thought, though: NZ has just been reported to have come out of recession. How does that happen, if not through money printing (or borrowing it, if your printer breaks down) and spending?
cb, Australia’s banks built the NZ real estate bubble largely off their AU balance sheets. NZ is like Ireland and the banks underneath the AU 4 pillars with both bad debt and exchange rate risk over their equity/goodwill. And it gets far worse and systemically unstable for all if NZ currency swap rates goes back to late 08 because there have been no takers for NZD bonds internationally since the Europeans pulled on the rmbs. sovereign guarantees will be tested first in places like NZ and Ireland in a deflationary spiral.
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