AUD/USD has been trading below it’s 200-dma for almost a year now but it looks like we are priming ourselves for another test. It comes in now near .9148 and we can expect plenty of big macro players to start re-assessing if we get a break above there.
Most of the big players are very bearish (Goldman Sachs lowering its forecast to 80 cents and most of the other banks issuing sell strategies) but these are the types of market situations when we often get big contrarian moves. With Australian interest rates now unlikely to fall any further (next move up in early 2015), with Chinese money still flowing into the property market and with the unemployment situation looking fairly stable, one would have to think that the contrarian bulls have a reasonable chance of making a killing.
The main reason for selling the AUD is given as ‘risk aversion’ but the logic in this argument is extremely flawed imho.
I’m still holding off on calling a base in this pair, given the lack of momentum, but the signs are again strengthening.