AUD staying heavy in early Asia

  • AUD/JPY is trading toward the lower end of its consolidation pattern and a break below 99.30 could well set off a round of stop-loss selling.
  • EUR/AUD continues to look extremely bullish and any dips back towards 1.3150 are sure to meet with welcome buyers (me included).
  • AUD/USD looks set to target last year’s lows just below .9600 and short-term resistance should be solid now near .9750.

All told, its hard to find any reason to be long the AUD at this very moment.

  1. great work sean with the new site. what a horrible day yesterday was. i never thought kiwi and aussie would tank so hard. what is ur feeling on both. do we fall w/o a durable bounce

  2. that is another 100 pips from here on. I see a rise to 0.9900 first from heavily oversold conditions. don’t forget we have a 600 pip fall this month itself. that is much more than aussie’s historic falls in a month. i think another 40 pips but I don’t think we fall more.

  3. The problem Nachiket is that so many big international asset managers are long Australian assets and they are being forced now to hedge against currency risk. If 9575 breaks then there will be more hedging and the big hedge funds are trying to force this to happen. Usual rules

  4. Hi, Sean,

    2 questions if I may,

    1, You’re targeting USD/CHF at 1.10, where is this figure(tech wise) coming from?

    2, Real money are forced to hedge, but why they didn’t hedge when they initiate their asset buying?


  5. Hi Mike, I’m looking for a small overall retracement of the massive intra-year downmove and asset managers will put on partial hedges usually but part of the strategy has a currency component as well

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