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19 Mar 2014
AUD/USD attempting the upside 0.9120
FXStreet (Guatemala) - AUD/USD has pulled away from the 0.91 handle to the upside, denying the southerly drift that had been building up over the past 24hrs from 0.9140.
AUD/USD is attempting 0.9120 currently ahead of the FOMC that is coming up. Meanwhile, strategists at Bank of America Merrill Lynch explained while they are certainly in the camp that the AUD will remain relatively well supported in 2014 (but face a significant decline thereafter), they believe it is important to disentangle the reasons for its resilience so far - specifically to distinguish fact from fiction and understand whether the factors are likely to be temporary or permanent. “In particular, we believe that investors should closely track Australia's balance of payments. Australia's gradually improving current account deficit was disproportionately financed by capital inflows into the mining sector and domestic government bonds in 2013. Excluding these capital inflows, Australia has effectively been running a capital account deficit since 2011”. They explained, therefore, the question of how long the AUD stays resilient partly rests on when these capital inflows to Australia will dissipate.
AUD/USD Head and Shoulders?
Meanwhile, Karen Jones, chief analyst at Commerzbank explained it is possible that what we are seeing is an inverse head and shoulders pattern which will offer a target of 0.9500, but as patterns do not outweigh downtrends, we will need a daily close above the 200 day ma to confirm.
AUD/USD Levels
The 20 DMA is 0.9009, the 50 DMA is 0.8936 and the 200 DMA is 0.9149. RSI (14) reads 45.14. Supports are ascending from 0.8990, 0.9009, 0.9050 and 0.9054. Spot is 0.9119 while resistances are 0.9141, 0.9169, 0.9204 and 0.9260.
AUD/USD is attempting 0.9120 currently ahead of the FOMC that is coming up. Meanwhile, strategists at Bank of America Merrill Lynch explained while they are certainly in the camp that the AUD will remain relatively well supported in 2014 (but face a significant decline thereafter), they believe it is important to disentangle the reasons for its resilience so far - specifically to distinguish fact from fiction and understand whether the factors are likely to be temporary or permanent. “In particular, we believe that investors should closely track Australia's balance of payments. Australia's gradually improving current account deficit was disproportionately financed by capital inflows into the mining sector and domestic government bonds in 2013. Excluding these capital inflows, Australia has effectively been running a capital account deficit since 2011”. They explained, therefore, the question of how long the AUD stays resilient partly rests on when these capital inflows to Australia will dissipate.
AUD/USD Head and Shoulders?
Meanwhile, Karen Jones, chief analyst at Commerzbank explained it is possible that what we are seeing is an inverse head and shoulders pattern which will offer a target of 0.9500, but as patterns do not outweigh downtrends, we will need a daily close above the 200 day ma to confirm.
AUD/USD Levels
The 20 DMA is 0.9009, the 50 DMA is 0.8936 and the 200 DMA is 0.9149. RSI (14) reads 45.14. Supports are ascending from 0.8990, 0.9009, 0.9050 and 0.9054. Spot is 0.9119 while resistances are 0.9141, 0.9169, 0.9204 and 0.9260.