Currency specialist, Patrick Reid reviews AUD movement against the GBP and USD
We have clearly broken the trend line but that was recent risk-on relief with G20, and we all know how long that lasted.
So, now we sit and wait because, let’s not be fooled, it was all about 11 December and the UK Parliament. Now this has been delayed it means more uncertainty. At the moment Brussels seem firm saying no on a renegotiation but right now it’s anyone guess.
The options are getting smaller – and time is running out. Take your pick.
(1) A General Election
(2) A Second Referendum
(3) No Deal
At the moment, I see this pair consolidating until the fireworks happen.
It was all going so well until the G20 facts upset everyone.
Some small details of the 90 day cease fire. No more Santa rally with equities. Then a miss on GDP which really kicked it lower. I’ve covered the USD side already with my macro article so I’d like to concentrate on the price action on the AUD side. With that in mind let’s look at the technical picture.
We tried to hit the 200-day moving average (DMA) at 0.7415, but failed and then it was all down hill. The 100 DMA didn’t put up much of a fight at 0.7220 and neither did 0.7310 or 0.7280 which were pretty robust levels.
Near term risk is the 100 DMA as shown per the white line. A dovish hike from the Fed via the DOTS may give a great level to sell but anything remotely hawkish should kick this much lower to 0.7150.
Yours to sell and it’s offered more than a night out with me.
Here’s the weekly and as you can see, 0.7150 could provide a much needed bounce for a torrid time.