The Aussie dollar (v USD) has broken the up trend since DEC 08, and has been one of the main beneficiaries of the carry trade (sell USD and buy AUD). It seems that these trades are unwinding, so I would expect a bigger correction than we have had already, AUDUSD has only retraced to 23.6 Fibonacci retrace. The recent fall looks impulsive, and the rally since has relieved OVERSOLD conditions.
2 options:
Either we HAVE completed an A-B-C correction and now we head to new highs, but it looks too shallow to me (subjective!). Also we see general dollar strength vs other majors such as £ and €.
OR we are just in first leg of a bigger correction (
my preferred scenario).
Look at the daily chart:
I think that we will see minimum retrace to 38.2 % Fib level at around .81 and am positioned accordingly with stops. I have room to sell more on strength, but a move above 9060 would make me cautious. A nice break of the 3rd fan line would also be good for adding shorts on a momentum move down.
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