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22 Sep 2014
AUD/USD: Bears in complete control, virtually no bounces
FXStreet (Bali) - AUD/USD remains trading at depressed levels, currently near multi-month lows at 0.8940, with broad-based USD strength still the main theme driving the pair, which is resulting in virtually no bounces since the break of a 4-month range below 0.92.
Jim Langlands, Founder at FXCharts, notes: "There is not too much domestic data due this week so traders will look to the HSBC China Flash Mfg PMI on Tuesday for an early guide and then to a Glen Stevens’ speech on Wednesday before focusing on the US data, which could again push the US$ higher and the Aud lower, should the firmer trend in the data continue."
From a technical perspective, Jim places little hope to those aiming for higher levels this week, noting that "the price action looks terrible, and with stops lining up under 0.8900 we could be in for an early test of 0.8890 (3 March low) and then 0.8860 (76.4% of 0.8660/0.9505), with a break of that would seeing an acceleration to the downside towards 0.8800 and to the 1.618 Fibo extension of the head/shoulder target at 0.8790."
That said, Jim think that "this could take a while to come about but the medium/longer term indicators do not look healthy and it is beginning to look as though the Aud may eventually want to retest the January low at 0.8660." As per the upside potential, "with little data due that is likely to cause any nasty short squeeze, the upside looks somewhat limited this week" Jim added.
Jim Langlands, Founder at FXCharts, notes: "There is not too much domestic data due this week so traders will look to the HSBC China Flash Mfg PMI on Tuesday for an early guide and then to a Glen Stevens’ speech on Wednesday before focusing on the US data, which could again push the US$ higher and the Aud lower, should the firmer trend in the data continue."
From a technical perspective, Jim places little hope to those aiming for higher levels this week, noting that "the price action looks terrible, and with stops lining up under 0.8900 we could be in for an early test of 0.8890 (3 March low) and then 0.8860 (76.4% of 0.8660/0.9505), with a break of that would seeing an acceleration to the downside towards 0.8800 and to the 1.618 Fibo extension of the head/shoulder target at 0.8790."
That said, Jim think that "this could take a while to come about but the medium/longer term indicators do not look healthy and it is beginning to look as though the Aud may eventually want to retest the January low at 0.8660." As per the upside potential, "with little data due that is likely to cause any nasty short squeeze, the upside looks somewhat limited this week" Jim added.