16 Apr 2014
AUD/USD: Pronounced base found? - ANZ
FXStreet (Bali) - After the impressive uptrend in the Aussie for the most part of 2014, Tim Riddell,
Head of Global Markets Research at ANZ, notes that a more pronounced base than anticipated may have formed off January’s 0.8655-60 low, despite admitting that a break below .93 would jeopardize the constructive outlook near term, with a retest of 0.92 the next target.
Key Quotes
"The uptrend has now extended through the standard retracement levels based off the AUD’s slide from October’s 0.9760 high (61.8% was at 0.9335). This implies that a more pronounced base than anticipated may have formed off January’s 0.8655-60 low. Therefore, there is now an increased potential for larger scale retracements into the 0.9585-0.9650 area."
"Despite this burgeoning shift in longer-term patterns, the current squeeze from the 0.8900 area in March shows signs of being stretched."
"Daily momentum appears to be peaking, but, as highlighted with respect to NZD/USD, that does not necessarily mean an imminent trend break. That said, the risk of a turn in the near-term trend and the potential for some pronounced retracements need to be addressed."
"Dips ought to hold above 0.9360 to maintain the uptrend and also potential for further extensions into the 0.95’s. Although a break of 0.9360 would be seen as a clear warning, a daily close below 0.9300 is needed to suggest that the trend has indeed turned in favour of retracements to at least the 0.9200 area, if not the favoured profile of frustrating (highly corrective) pullbacks into the 0.89-0.91 area."
Head of Global Markets Research at ANZ, notes that a more pronounced base than anticipated may have formed off January’s 0.8655-60 low, despite admitting that a break below .93 would jeopardize the constructive outlook near term, with a retest of 0.92 the next target.
Key Quotes
"The uptrend has now extended through the standard retracement levels based off the AUD’s slide from October’s 0.9760 high (61.8% was at 0.9335). This implies that a more pronounced base than anticipated may have formed off January’s 0.8655-60 low. Therefore, there is now an increased potential for larger scale retracements into the 0.9585-0.9650 area."
"Despite this burgeoning shift in longer-term patterns, the current squeeze from the 0.8900 area in March shows signs of being stretched."
"Daily momentum appears to be peaking, but, as highlighted with respect to NZD/USD, that does not necessarily mean an imminent trend break. That said, the risk of a turn in the near-term trend and the potential for some pronounced retracements need to be addressed."
"Dips ought to hold above 0.9360 to maintain the uptrend and also potential for further extensions into the 0.95’s. Although a break of 0.9360 would be seen as a clear warning, a daily close below 0.9300 is needed to suggest that the trend has indeed turned in favour of retracements to at least the 0.9200 area, if not the favoured profile of frustrating (highly corrective) pullbacks into the 0.89-0.91 area."