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16 Apr 2014
AUD/USD may have found an important base - ANZ
FXStreet (Bali) - Tim Riddell, Head of Global Markets Research at ANZ, notes that the weekly and monthly AUD/USD patterns are more supportive of a pronounced base.
Key Quotes
"It should be noted that the extension of recent rebounds has altered the approach towards the January low. The profile of monthly momentum is not shown, but slippage into the deep retracement zone (0.8550-0.8675) occurred with some notable monthly divergence. A broad consolidation channel also effectively held, and a supportive turn in weekly momentum has developed off January’s 0.8655-60 low."
"Given that all the standard retracement levels based off the decline from 0.9760 (October 2013) have been broken, it appears that a more pronounced base has developed below 0.8750. In fact, current rebounds could be forming merely the initial leg of broader corrections to offset the slide from the 1.0600 area. Therefore, especially if the current uptrend holds, AUD/USD could extend into the 0.9585-0.9650 area as part of a longer-term series of corrective rebounds off January’s low."
"Although the potential of a broader base having formed needs to be addressed, near-term profiles still suggest that the AUD is at risk of deep pullbacks once the completion of this squeeze has been confirmed. The gains seen from mid-March are still, even if the longer-term profile is altering, considered to be corrective."
"Any slippage below 0.9300 could be enough to trigger an early retracement towards 0.9200 or even a full unwind of the recent rally and a slide into February’s effective 0.89-0.91 congestion zone."
Key Quotes
"It should be noted that the extension of recent rebounds has altered the approach towards the January low. The profile of monthly momentum is not shown, but slippage into the deep retracement zone (0.8550-0.8675) occurred with some notable monthly divergence. A broad consolidation channel also effectively held, and a supportive turn in weekly momentum has developed off January’s 0.8655-60 low."
"Given that all the standard retracement levels based off the decline from 0.9760 (October 2013) have been broken, it appears that a more pronounced base has developed below 0.8750. In fact, current rebounds could be forming merely the initial leg of broader corrections to offset the slide from the 1.0600 area. Therefore, especially if the current uptrend holds, AUD/USD could extend into the 0.9585-0.9650 area as part of a longer-term series of corrective rebounds off January’s low."
"Although the potential of a broader base having formed needs to be addressed, near-term profiles still suggest that the AUD is at risk of deep pullbacks once the completion of this squeeze has been confirmed. The gains seen from mid-March are still, even if the longer-term profile is altering, considered to be corrective."
"Any slippage below 0.9300 could be enough to trigger an early retracement towards 0.9200 or even a full unwind of the recent rally and a slide into February’s effective 0.89-0.91 congestion zone."