logo
  Join        Login             Stock Quote

Aussie to Weaken More?

 November 30, 2012 12:41 PM


With all the attention on the Euro, thanks to the Greek saga, and increasingly the Dollar, complements of the fiscal cliff scare, other currencies are receiving limited coverage. One could even say they fly under the radar. Among them is the Australian Dollar, which had very little new developments, at least from the fundamental perspective. However, a quick glance at most of Aussie's pairs reveals a weakness. Now we have to wait and see whether it is a normal consolidation, or perhaps a start of a larger selloff.

The RBA has its monthly policy meeting next week and this could prove to be a catalyst for a more inspired behavior. Recently more and more analysts predict another rate cut, which should be AUD negative. While there is no consensus, the more voices calling for lower rates, the higher the chances for a decline. In days leading to the RBA meeting, that could become "priced in" if market participants at large position themselves accordingly. The interest rate decision will settle the dispute, but the AUD will probably drift lower in the meantime.

[Related -Defensive Sectors Lead Hesitant Market, But Traders Honor Long-standing Bullish Support]

One of the crosses where this softness is not well pronounced is the AUD-JPY. Of course, this mostly due to falling fortunes of the Yen. That said, this pair could be a good proxy for the broader fate of the Aussie – if it moves lower that would confirm the strain on the AUD in a broader sense. The hourly chart has already formed a potential topping pattern with a support at 85.20. Should this level be breached, the price will likely keep falling, maybe enough to capture 50-60 quick pips.

[Related -Will Janet Yellen's Outlook Prevail?]

Outside of this, I will focus on short-term trading on Friday. Like every week, London opening could present breakout opportunities, depending on price ranges in preceding hours. I find the USD pairs most suitable for this approach. In addition, GDP figures from Canada often create increased volatility in the Loonie, making it a key event to watch on Friday.

Mike K.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageDefensive Sectors Lead Hesitant Market, But Traders Honor Long-standing Bullish Support

Last week, the major indexes fell back below round-number thresholds that had taken a lot of effort to read on...

article imageWill Janet Yellen's Outlook Prevail?

Federal Reserve Chairwoman Janet Yellen told the crowd last week that rate hikes are coming. The rise will read on...

article image3 Deep Value Stocks That Could Mount A Turnaround

Although the market action was a bit choppy in the first quarter of 2015, one fact is inescapable: the read on...

article imageFrenzied Speculative Activity In China's Equity Markets

It's time to take another look at the recent developments in China's equity markets as major indices hover read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.