The Aussie has been the worst performer of 2013 as I write and really is due a move higher - Down over 11.8% YTD it is really oversold, It seems for now that we could see an Inverse H&S formation, but it may be to soon to call it. Like all FX pairs - a lot depends on the Taper decision as this will directly hit EM markets and the AUD will be hit as a proxy hedge to further declines in EM markets. This combined with the Quant view that the interest rate differential is playing a major part in the decline.

However I do see some possible bounces in this pair, but is likely to trade sideways for a while as we saw through June and July and we should see a test of 0.9320 before too long.

As we can see there was a lot of sideways movement before heading lower, but we have regained the area above 0.90 and I expect us to trade upwards to the higher bound here.

As we can see on the daily, the stochasctics are running upwards and with this momentum I see 0.93 being traded. But I don't see a technical reason, for now, to break higher and for this reason I see 0.932 being around where we trade in October
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