The aussie has been sitting pretty between 0.93 and 0.94 recently but it seems the RBA minutes, comments from Debelle and worries over Iron ore prices were enough to finally force some longs to cash out and call it a day.
We’ve been flushed down through 0.9300 to 0.9253, where we sit at the moment. The second failure to meaningfully breach and hold above 0.94 would suggest we see a decent pullback.
AUD/USD daily chart 20 05 2014
Coming down to the low 0.92’s we start to get into a decent area of support. First we have the 55 wma at 0.9225, the 55 dma at 0.9241. Should we get into it it will be the first time the dma has been touched since March. Below there 0.9200 is a level that has seen support come in on the last two occasions. Just below that we have an even stronger level at 0.9167/70 by way of the 200 dma, Jan support line and old resistance level. A break through all of that and we could be seeing 0.90 pretty sharpish.
I was considering letting some of my position out near 0.95 and more recently at 0.94. I was actually hoping for another look at 0.94 to let some of my longs out but I think I’ve missed that boat. I like the look of the tech between 0.9160 and 0.9200 so I may add some further longs for a short term play.
I’m more or less ignoring whatever noises come out from the RBA at the moment. Comments are having no sway on the market whatsoever. What is of importance are stories like the Iron ore prices as that is what will move the aussie. If we start to see further deterioration in these types of news stories longs are going to have to be very cautious.
