Monday November 15, 2010 - 13:54:04 GMT
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Aussie Testing Intermediate 50% Level
The AUD USD was under
pressure last night for the sixth straight day, but may have found support at
the 50% level of the intermediate range of .9462 to 1.0182. The Mid-Point of
this range is .9822 and the Fibonacci level of this range is .9737.
The current short-term range
is .9651 to 1.0182. This range has created a retracement zone at .9917 to
.9854. The main range is .8770 to 1.0182 with .9476 to .9309 its retracement
It is important to look at
all three ranges because although the market is down 6 days from the top, no
short-term, intermediate term or long-term main bottoms have been violated,
meaning the uptrend is still in tact. In addition, one should note the 50%/Fib
cluster at .9822 and .9854.
Last week the Aussie broke a
long-term uptrending Gann angle at .9930. Stops under this angle helped trigger
an acceleration to the downside. Downtrending Gann angles come in at .9942 and
Hereâ€™s what to watch for
today. If last nightâ€™s low at .9812 holds, then the market may retrace 50% of
the break from the top at 1.0182. This makes .9997 a potential upside target.
This is important because if a bearish trend is developing then the
Aussie/Dollar has to make a secondary lower top.
The shedding of risky assets
is the catalyst behind the weakness. The Dollar is getting stronger as global
equity markets and commodities weaken. The Australian Dollar has been the
beneficiary of greater demand for commodities. Although the Reserve Bank of Australia has been
hiking interest rates while the U.S. Federal Reserve has maintained its easy
money strategy, recent rises in U.S. Treasuries have encouraged traders to pare
positions in the Aussie.
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