Regular readers will not be surprised
if the topic for this morning is the Aussie dollar. We have been anticipating
its decline for some time but, much in the manner of the writer Mark Twain who,
when his obituary was, erroneously, printed in a London newspaper, is reported
to have said “Rumours of my demise have been greatly exaggerated”, it might be
only now that our words are bearing fruit.
On this occasion the Aussie has gone
well below its 200 Day EMA and is now moving down through the solid second
level support that existed at the nice round figure of 0.92.
All this happened very quickly, particularly
in light of the pronounced rise that took place in the closing days of last
week.
Of course, one move down like this
does not constitute a downward trend, but it could be the start of one.
A
tale of two hemispheres
What is interesting is the fact that
the Canadian dollar seems to be getting a boost of its own on the back of the strength
of its neighbour in the North American continent, the Greenback. This is at the
same time that the efforts of the New Zealand Central Bank have been directed
at devaluing that country’s currency.
The NZDCAD pair is, right now,
grappling with its own support level at 0.905.
The world markets almost seem to be
lumping the Kiwi in with the Aussie in the same manner as the CAD is getting a
lift from US dollar sentiment. This is of particular interest as the Canadian
in a commodity currency, and commodities of all sorts are under pressure at the
moment.
In contrast to the dog days of summer
at the end of July and the start of August, when the market was well and truly
in the doldrums, it now looks like it is, once more, game-on for Foreign
Exchange trading.
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