AUD/USD Forecast Dec. 05, 2011, Fundamental Analysis

The AUD/USD pair reached to its highest level in almost three weeks, where the US dollar lost momentum against most of its major counterparts due to risk appetite that dominated the market last week.

The AUD/USD pair could continue its upside movement with a little correction to the downside, but with any change in the current sentiment the US dollar could restore its momentum and return to dominate the FX market.

On Monday at 22:30 GMT (Sunday), the Australian economy will release the AiG Performance of Service Index for November, where it had a previous reading of 48.8.

At 00:30 GMT the ANZ Job Advertisements for November will be published, where it had a prior reading of 0.7%.

At 15:00 GMT the U.S. economy will release the ISM Non-Manufacturing for November, where it’s expected to come at 53.5 from the previous reading of 52.9.

On the other hand, Factory Orders for October will be released at the same time and expected to remain flat following 0.3% rise the previous month.

AUD/USD Forecast Dec. 2, 2011, Technical Analysis

AUD/USD fell during the session, but bounced back to form a hammer by the end of the day. This shows that the pair still wants to rise, and that the majority of traders think that the pair should rise. However, with the Non-Farm Payroll numbers set to be released during the US morning session, this pair could move again in a rapid manner today. We prefer selling if the bottom of the hammer gets violated as it shows a “hanging man”. The breaking of the highs would run into resistance, and could perhaps struggle.

AUD/USD Forecast Dec. 2, 2011, Technical Analysis AUD/USD Forecast Dec. 2, 2011, Technical Analysis

Markets Over React to the Central Bank Annoucement.

Strategists said Europe’s sovereign debt problems will continue to be the key driver for the euro. The EU and IMF must now do something positive to help the debt crisis and protect the euro.

Markets Over React to the Central Bank Annoucement.

The news today can be best interpreted from what investors and analysts are saying this morning.

“As Europe dithered, monetary policy makers acted, even if their ‘actions’ have more symbolism than significance,” said strategists at RBC Capital Markets. “Markets breathed a huge sigh of relief.”

Yesterdays move by the Central Banks signaled leadership and direction. This is what the markets are looking for. Investors jumped head first into the markets.

The move is an attempt to “ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity,” the banks said in a statement.

“It’s the first time we’ve seen this type of global coordination since November 2008,” said Michael James, a senior equity trader at Wedbush Morgan. “The degree of coordination sends a message to the markets that global leaders are going to do whatever they need to do to instill confidence in the markets.”

“The fundamentals just keep marching forward despite the market turmoil,” said Doug Cote, chief investment strategist at ING. “The real economy seems indifferent to the EU debt headlines.”

Central banks are “hoping the rate is so attractive that hitting the swap line makes business sense as opposed to signalling vulnerability,” he said. “They hope if they draw enough institutions, the stigma will decline, stresses on the liquidity front will ease and that will ease some of the bearish demeanor towards the euro.”

“The price action was because the market was short, not being bought by people entering new long positions in euros and equities,” he said. “It’s people closing shorts.”

This morning’s coordinated action also implies that the central banks feel conditions are much worse than they would otherwise lead us to believe, which is why more liquidity is needed immediately,” said Kathy Lien, director of currency research at GFT. “The markets are always relieved to see central banks put up a unified front, especially on the heels of a similar increase in liquidity from China.”

Removing the risk of liquidity problems increasing further as year-end approaches provides a major relief to financial markets,” said Greg Anderson, senior currency strategist at CitiFX in New York.
“The level of cooperation and responsiveness being shown by the G7 central banks suggests that policy makers are now highly engaged and likely to come forward with further measures in coming days.”

“The big deal is just saying they are going to be involved. It’s not like they brought out the tank, they brought out the six shooter,” he said.

“It’s not enough. It’s a temporary liquidity initiative which is good, but it won’t solve the problem, because in a couple of days, the problems will put on their hats again,” De Leus said.

 

AUD/USD Forecast, Dec. 1st, 2011, Technical Analysis

The AUD/USD shot straight up during the session as the “risk on” trade came back into the fold as the central banks of the world have coordinated to make the borrowing of Dollars cheaper for the banks of the world. The idea is that it will take the idea of another Lehman Brothers collapse off the table. The Aussie shot straight to the 1.03 level where it finally met strong resistance at the 61.8% retrace. The knee-jerk reaction is strong, but if you look at the AUD/USD over the last couple of days, to say it is overextended isn’t exactly a stretch at this point. We are willing to fade this rally unless we clear the 1.03 again. We are looking for shorter time frames to lead the way for a nice fade.

AUD/USD Forecast, Dec. 1st, 2011, Technical AnalysisAUD/USD Forecast, Dec. 1st, 2011, Technical Analysis

AUD/USD Forecast Nov. 30th, 2011, Technical Analysis

The AUD/USD pair rose above the parity level on Tuesday as the commodity trade took off. The appetite for commodities was fueled by hopes of an EU workout. The pair has lost a bit off the top, but is closing above the parity line. The trend is certainly down, but with this strong of a push higher – we certainly must be aware that this move is countertrend. The 50% retrace of the move down is roughly at 1.03, and area that has been resistive in the past. With this in mind, we are quick to take any profits on long positions. We actually prefer being short of this pair, but not until we get some price action showing weakness.

AUD/USD Forecast Nov. 30th, 2011, Technical Analysis AUD/USD Forecast Nov. 30th, 2011, Technical Analysis

AUD/USD Forecast Nov. 29th, 2011, Technical Analysis

The AUD/USD pair surged during the Monday session as rumors flew around the marketplace of bailouts and promises of IMF money for Italy. Even after the IMF denied this rumor, there were other hopes of various fixes. The markets then ran up to just under parity, and it was at that point that the sellers came back into the market. The selling was fairly strong, and it appears that we are going to struggle to get above that parity level. The market seems to have retained its bearish tone at this point, and as such we are selling rallies in the AUD/USD.

AUD/USD Forecast Nov. 29th, 2011, Technical Analysis AUD/USD Forecast Nov. 29th, 2011, Technical Analysis

AUD/USD Forecast for the Week of Nov. 28th, 2011, Technical Analysis

The AUD/USD pair had a bearish week again as the world’s risk appetite continues to deteriorate. The pair is rapidly approaching a hammer on the weekly chart that was the start of the most recent up move in this pair. The 0.95 level just below should be supportive, so selling at this point is going to be difficult. We prefer to sell rallies at this point in time, and will continue to do so as negative headlines will continue to push this pair lower. The breaking of 0.93 to the downside would shift this into a down trend overall in our opinion. The markets are very nervous, and that never bodes well for the Aussie. We sell rallies, and will not buy at this point.

AUD/USD Forecast for the Week of Nov. 28th, 2011, Technical Analysis AUD/USD Forecast for the Week of Nov. 28th, 2011, Technical Analysis

AUD/USD Forecast Nov. 28th, 2011, Technical Analysis

The AUD/USD pair attempted a rally on Friday only to fail and print a second shooting star in a row. Both of these are at the bottom of a fall, and this shows that the pair may continue its descent lower as the headlines continue to deteriorate in the EU. The run to the US Dollar will continue to fuel the push lower, and the commodities markets falling will help push it lower as well. We don’t but the riskier currencies at this point, including the Aussie.

AUD/USD Forecast Nov. 28th, 2011, Technical AnalysisAUD/USD Forecast Nov. 28th, 2011, Technical Analysis

AUD/USD Forecast Nov. 25th, 2011, Technical Analysis

AUD/USD rose during the session on Thursday as traders started short-covering. The pair is decidedly bearish, and sold back off later in the session. The pair finished the day forming a shooting star at the bottom of the fall, and shows that further weakness is probably in store. The breaking of the bottom of the session’s range would be another sell signal in this pair. The 0.9350 level below seems to be calling and we think that the pair will oblige the markets. The rallies are to be sold, and we don’t buy the Aussie because of the massive amounts of headline risks out there currently.

AUD/USD Forecast Nov. 25th, 2011, Technical Analysis AUD/USD Forecast Nov. 25th, 2011, Technical Analysis

AUD/USD Forecast Nov. 24th, 2011, Technical Analysis

The AUD/USD pair fell apart on Wednesday as traders are decidedly dumping the riskier assets in the markets. The Aussie is highly sensitive to global risk appetite, and as such should continue to fall. We believe at this point you simply cannot buy this pair, and every rally should be viewed as a potential selling opportunity. The lows at 0.9350 are calling, and we think this pair will visit that area before it sees a level greater than parity.

AUD/USD Forecast Nov. 24th, 2011, Technical Analysis AUD/USD Forecast Nov. 24th, 2011, Technical Analysis

AUD/USD Forecast Nov. 23rd, 2011, Technical Analysis

AUD/USD fell again on Tuesday, albeit only by a small amount. The pair looks vulnerable at the moment, and the “risk off” attitude of the global markets will not be very conducive to the buying of the Aussie dollar. However, we do see a lot of support between present levels and the 0.95 level, and therefore will be selling rallies, not shorting here. Buying isn’t possible with all of the headline risks out there presently.

AUD/USD Forecast Nov. 23rd, 2011, Technical Analysis AUD/USD Forecast Nov. 23rd, 2011, Technical Analysis

AUD/USD Forecast Nov. 22nd, 2011, Technical Analysis

AUD/USD fell hard on Monday as traders continued to sell of the risk trade. The Aussie will always be sensitive to sentiment, and sentiment is poor at best lately. With this in mind, we sell rallies, and have no real interest in buying the Aussie at all. The area below is still in the massive support zone down to 0.95, and could produce pops in the market. Those we continue to be sold by us in the near-term.

AUD USD Forecast Nov. 22nd, 2011, Technical Analysis AUD USD Forecast Nov. 22nd, 2011, Technical Analysis

AUD/USD Forecast Nov. 21st, 2011, Technical Analysis

AUD/USD fell during the session on Friday after an initial bounce to form a shooting star. The pair looks weak, and the rallies are all being faded at this point. The parity level should offer some support, and we think that another bounce could be coming just under this area, perhaps at the 0.99 level. However, as long as the headline risks out there keep coming, the pair will continue to grind lower. This pair is very popular, so be aware of the fact that the move down will more than likely be a grind, not a sudden move. We sell rallies, and do not buy this pair.

AUD/USD Forecast for the Week of Nov. 21st, 2011, Technical Analysis

AUD/USD fell very hard during the week as traders continue to shun the riskier assets around the world. The Aussie is very risk-sensitive, so the fall was to be expected. The parity level is currently holding up the pair as support, and looks like the start of tough support coming up. With this in mind, this pair is a sell – but should be more of a grind than a sprint south form here. We like selling rallies as well, but don’t buy. If the parity level gives way with any meaning, the 0.9350 level will be targeted, but could take some time to reach.

AUD/USD Forecast Nov. 18th, 2011, Technical Analysis

The AUD/USD pair broke below the parity level on Thursday, and continued its bearish tone overall. The 0.99 level below should be somewhat supportive, and if that area gives way – this pair should fall much, much lower. The upside is going to be difficult in this pair at this point in time as it is so risk sensitive. The world’s markets are getting nervous, and this is never a good thing for the Aussie. We like selling a break below 0.99, and any rallies that present themselves.

AUD/USD Forecast Nov. 17th, 2011, Technical Analysis

The AUD/USD pair fell again on Wednesday as traders sell off risky assets. The pair is presently supported at the parity level, and that will be the key to our next trade in this pair. At present levels, we have no trade, but would be interested in buying on supportive candles at parity, or selling if we close below that level. Until then, we are sitting tight in this pair. Even with a pop higher, we think that the 1.05 level is the top of the market for a while.

AUD/USD Forecast Nov. 17th, 2011, Technical AnalysisAUD/USD Forecast Nov. 17th, 2011, Technical Analysis

AUD/USD Forecast Nov. 17th, 2011, Technical Analysis

AUD/USD Forecast Nov.16th, 2011, Technical Analysis

The AUD/USD pair fell on Tuesday, but bounced at the end of the session to form a hammer. The bullish candle looks as if it is reiterating the support at the 1.01 level. The pair has been grinding lower over time, and we think that trend could continue, but there looks to be a bounce in the short-term. Because of this, a buy signal is generated if we break the top of the Tuesday session. The move could signal a run to 1.04 or so, but we think it is just a short-term trade at this point. With the Aussie being so sensitive to headline risk, we are not inclined to own it for too long. A break below parity has us selling.

AUD/USD
AUD/USD Forecast Nov.16th, 2011, Technical Analysis

AUD/USD Forecast Nov. 15th, 2011, Technical Analysis

AUD/USD fell on the Monday session as risk assets sold off around the globe. The pair is highly sensitive to this kind of fear, and sold hard as a result. The parity level below looks very supportive, and the 1.01 level has been pretty active for buyers as well. The market is absolutely out of control in general at the moment, and this pair will be very dangerous as a result. The pair can’t be sold until we are under that parity level, so we are looking to see if there are supportive candles in the near-term.

AUD/USD Forecast Nov. 15th, 2011, Technical Analysis

AUD/USD Forecast for Nov. 14th, 2011, Technical Analysis

The AUD/USD pair rose during the Friday session as the manic attitude of currency markets continues. The Greek swore in a new Prime Minister, and the Italians passed an austerity budget. The trading took this as the EU being saved. (Again.) Of course, there are a lot of details missing from the bailout funds, and the market is probably vulnerable to headline risks at this point because of the violent nature of the move. We see resistance ahead, and will be looking to sell near the 1.04 – 1.05 area if we get the correct price action.

AUD/USD Forecast for the Week of Nov. 14th, 2011, Technical Analysis

The AUD/USD pair fell during much of the week, but got a bounce to form a hammer just above the parity level. This bounce shows that there could be massive buying of the Aussie as the “risk on” trade continues due to the situation in Europe being worked on. The markets are going into a relief rally mode, and as a result we see riskier currencies like the Aussie get bid up. The 1.05 area above does look a bit resistive though, so we don’t want to buy until we close over that level. Once that happens, we will be aiming for the 1.10 level. Selling isn’t possible until we close below the parity level.