Wednesday, May 29, 2013

Aussie breaks through major support.

AUDUSD Technical

The level of 0.96 represents a major support for the AUDUSD pair, and last night it broke through that to settle this morning around 0.9550. The overall trend is very definitely down although the pair has a number of residual levels of support in this region before it is plain sailing down to the next major support, around 0.87. After that there is nothing at all, technically, to stop it reaching for 0.80.

On the fundamentals, the IMF has cut China’s growth forecasts for this year and next, to 7.75% from 8.0%. This is blamed on lower Chinese exports. As so much of the Australian economy is tied up in the export of commodities to China, particularly Iron Ore, when that great nation sneezes it can truly be said that Oz catches cold. When it is also considered that commodity prices are falling globally and that Australian monetary authorities are concerned about the effect the strong AUD is having on the part of the economy that is outside of mining, the fundamental outlook for the AUD is bearish in the extreme.

Algorithmic trading

We woke up this AM (GMT + 1) to discover that our latest trade, placed by the Silver Trigger routine as the AUDUSD pair went through that major support, has already reached its first profit level and the Stop Loss has been moved to Break-Even.

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