27 Oct 2013
AUD/USD, how much its slips from here to reveal next trend - ANZ
FXstreet.com (Barcelona) - The style of the ongoing interim slippage in the AUD/USD is of increasing importance to evaluate the technical picture, according to Tim Riddell, Head of Global Markets Research at ANZ.
Key Quotes
"The dynamic push above 0.9510-30 triggered a larger-than-anticipated squeeze and a spike above 0.9720 (50% of 2013’s range). Although the strength of recent gains could indicate larger scale retracements to 99.60-70 (50% of the range off the 1.1080-85 high), this would still be seen in the context of a broad consolidation."
"At present, slippage remains contained and so maintains the bias for the squeeze to continue towards the higher retracement level. That said, and given that the bias is towards a broad trading range being defined, any sign of failure could unwind this uptrend and trigger a swift turn in trend."
"The formation of a bearish outside day last week puts critical importance on the depth and style of current slippage. If rising trend support (currently 0.9565) holds and AUD pushes back above 0.9670, the uptrend should resume with measured targets in the 0.9820-0.9920 area. Conversely, failure to hold 0.9565 would undermine the squeeze, though a fall below 0.9520 would be needed to confirm an end to the recent rally and so risk a retest of 0.9280."
Key Quotes
"The dynamic push above 0.9510-30 triggered a larger-than-anticipated squeeze and a spike above 0.9720 (50% of 2013’s range). Although the strength of recent gains could indicate larger scale retracements to 99.60-70 (50% of the range off the 1.1080-85 high), this would still be seen in the context of a broad consolidation."
"At present, slippage remains contained and so maintains the bias for the squeeze to continue towards the higher retracement level. That said, and given that the bias is towards a broad trading range being defined, any sign of failure could unwind this uptrend and trigger a swift turn in trend."
"The formation of a bearish outside day last week puts critical importance on the depth and style of current slippage. If rising trend support (currently 0.9565) holds and AUD pushes back above 0.9670, the uptrend should resume with measured targets in the 0.9820-0.9920 area. Conversely, failure to hold 0.9565 would undermine the squeeze, though a fall below 0.9520 would be needed to confirm an end to the recent rally and so risk a retest of 0.9280."