Thursday September 30, 2010 - 20:37:13 GMT
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Forex Hound - www.forexhound.com
Aussie Dollar Set-up to Tumble; Reversal Top Could Form
The U.S. Dollar strengthened this morning
after touching a five-month low against the Euro. The subsequent break in the
EUR USD has put this pair in a position to form a bearish closing price reversal
The AUD USD is also showing signs of
topping and is in a position to post a daily closing price reversal top. The
sell-off in the U.S.
equity markets is helping to lead the charge lower.
Technically, the Aussie Dollar is trading
inside a small range of .9462 to .9733. This makes .9598 to .9566 a retracement
zone target. This is really nothing compared to the bigger picture. The longer
rally from .8770 to .9733 makes .9251 a potential downside target should a
clean closing price reversal top develop. An uptrending Gann angle at .9290
could slow down the pace of the expected decline.
This morningâ€™s break in both currency pairs
was most likely triggered by long position squaring caused by three
economic reports. This morningâ€™s 2Q GDP, Weekly Initial Claims, and Chicago PMI
all came out better than their estimates, encouraging long traders to adjust
Many traders had been buying the Euro and
the Aussie at will in expectation of a new round of quantitative easing by the
U.S. Federal Reserve. Based on this morningâ€™s data, the Fed may not have to
print money as aggressively as previously thought.
stocks also fell as traders made month-end adjustments. Even with todayâ€™s
sell-off stocks will post one of the best Septembers on record.
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