Optimism strikes. The “bulls” began to flood the market yesterday after the release of the Australian employment report causing a rally that squeezed the “bears”. The Australian Bureau of Statistics showed that the unemployment levels fell to 5.1 percent in August from 5.2 percent the previous month. This small change in the unemployment level was the catalyst for the beginning of a trend reversal.
Today the AUD continued to rally against the USD after a more than disappointing U.S. employment report. The end result was that the AUD surged to a monthly high of $1.039 against the USD. Where does the AUD.USD go from here?
On August 17, 2012 I forecasted a trend reversal in the AUD.USD and stated that the pair would zigzag downward finding its bottom just past parity. If we take a look and the emerging trend, it's obvious that we could have anticipated this reversal. After the pair completed its “(A)” wave move, it then bounced off the bottom trend-line to begin the “(B)” wave. The "(B)" wave has since retraced 50% of the previous downtrend which is the expectation for this type of correction and is getting ready to turn.
Don’t be fooled by this recent rally, find out what’s really going on with the AUD.USD. Join the Forward Thinking waiting list today.
Indicators on Watch for the AUD.USD
- NZD Reserve Bank of New Zealand Rate Decision (Wednesday)
- USD Producer Price Index (Thursday)
- USD Initial Jobless Claims (Thursday)
- USD Federal Open Market Committee Rate Decision (Thursday)
- USD FOMN to Release Projections of Economy and Fed Funds Rate (Thursday)
- USD Fed’s Bernanke Holds Press Conference (Thursday)
- USD Consumer Price Index (Friday)
- USD Advance Retail Sales (Friday)
- USD U. of Michigan Confidence (Friday)
Your currency analyst,