
The
Australian dollar versus the US dollar (AUDUSD pair) has reached an important
resistance level and shows every sign of breaching it, on the daily chart. As
well as that, a well defined double bottom, which is a classical indicator of
the probability that the way forward for the instrument concerned is up, is in
evidence.
The 200 day
Simple Moving Average, while sloping downward, still has some clear daylight
between it and price. This leaves scope for a rise, at least as far as the 200
SMA.
On the fundamental
analysis front, there seems to be a perception that things might not be that
bad economically in Australia
as was thought. China
seems to have reached some type of a consolidation in its growth, which is good
for the Aussie, and while unemployment figures were lower than expected for
August, a six per cent rate is not to be sneezed at. There was a decisive result in the elections
just past, which is also good for the currency, at least in the short term.
Much will
depend on the minutes of the Reserve Bank of Australia , which are due out on
Tuesday.
In the USA ,
the news that Larry Summers, former Treasury Secretary in the Clinton government, and a noted hawk, who would presumably end Quantitative Easing (QE) quickly if he were
selected, has actually withdrawn from the selection process for the new leader
of the Federal Reserve, to succeed Mr. Bernanke, will tend to weaken the US currency.
The big
event later this week is the meeting of the same Fed, which is expected to
announce some tapering of QE but it is our belief that this will be mild
and has, in fact, already been priced in. If there is no change in QE after this meeting, then it is a case of "watch out below" as far as the Greenback is concerned.
Great..able to learn about many points.thanks.
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