Australian Dollar Cross Pick 04.11.2012
Indeed, the rally to 1.2599 appears to have been a false break as the AUDNZD failed to close above the 10-Day SMA (1.2606), and we may see the pair give back the advance from earlier this week as the downward trending channel continues to take shape. As the relative strength index teeters around oversold territory, a move back below 30 could ultimately spur a fresh yearly low in the exchange rate, and we will maintain our bearish call for the AUDNZD as the fundamental outlook for Australia deteriorates. As the recent developments coming out of the $1T economy falls short of market expectations, a dismal employment report could trigger a sharp selloff in the Australian dollar, and the aussie should continue to track lower in 2012 as market participants see the Reserve Bank of Australia taking additional steps to stem the downside risks for the region.
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