AUD/USD – Short term trend DOWN, Long term trend DOWN
The AUD/USD falls further as risk selling on fears of a deeper slowing of the global economy gather momentum. China’s manufacturing came in at a three year low triggering concerns that the Chinese economy will come to an abrupt halt. This flows directly to the Australian economy which depends on exports to China for its sustained economic growth. German bond auctions only managed to attract buyers for half of the issue igniting fears the European debt contagion has taken hold of the core economies. German bonds up until now have been safe haven, however their yield of approx 2% deterred investors who found the return too low in the current environment. Reports circulated overnight that Southern Europe is in deep recession with the core economies of Germany and France also headed for recession. The US durable goods orders came in weaker than expected as Americans pulled back on spending and the much hoped for US economic recovery now a long way off as the European debt woes weigh in. Where to from here? European action or lack thereof, to address the debt crisis is causing the market to flee from risk into safe havens with US Tbonds in big demand. Gold is losing its lustre with inflation no longer seen as a threat and hedging positions being unwound. Stock markets, risk currencies and commodities all aggressively sold on risk fears of a deeper global economic slowdown. The AUD/USD is currently trading at 0.9680, with critical support at 0.9370 and resistance at 0.9850. We expect a test of 0.9370 over the coming week and a break of this level sees further weakness to 0.8850.
EUR/AUD – Short term trend UP, Long term trend UP
The EUR/AUD is currently trading at 1.3770 and we expect further gains to 1.4000 and 1.4350 whilst 1.3580 holds support.
GBP/AUD –Short term trend UP, Long-term trend UP
The GBP/AUD rally continues and is currently trading at 1.6020. We find support at 1.5800 and expect a test of 1.6350 in the short term.
AUD/JPY – Short term trend DOWN, Long term trend DOWN
The AUD/JPY is currently trading at 74.90 with resistance at 76.20 and support at 72.00 which we expect may be tested over the coming trading days.
AUD/NZD – Short term trend DOWN, Long term trend UP
The AUD/NZD support level at 1.3080 is currently being tested and with the AUD downside gaining momentum, we may see the cross give up gains and head back to 1.2870 with resistance at 1.3165.
AUD/CHF – Short term trend DOWN, Long term trend UP
The AUD/CHF has fallen to 0.8880 and is currently trading at 0.8915. We find resistance at 0.9025 and support at 0.8840 and 0.8665.
AUD/DKK – Short term trend DOWN, Long term trend DOWN
The AUD/DKK has fallen further to 5.3990 and we look for a test of support at 5.3500 and 5.2900 whilst 5.4250 holds the rally.
EUR/CHF – Short term trend DOWN, Long term trend UP
The EUR/CHF has breached support at 1.2320 and is trading at 1.2270. Further downside to 1.2180 is expected whilst 1.2320 holds the topside. The SNB will defend 1.2000 and we expect this level will remain intact and untested.
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