24 Jan 2014
AUD/USD: Evidence of healthy downtrend reinforced
FXstreet.com (Bali) - Another big selling day for the Aussie sent the rate 1 cent lower Thursday, a common pattern which has been repeated 3 times so far this year, - Jan 14, 16 and 23 -, as AUD gets hurt as a proxy of EMs.
While price action continues to scream selling the AUD each time buyers attempt to turn a well-established downtrend around, one should not overlook the fact that the currency has also been giving reassuring some clear signs that the sour sentiment is here to stay for the time being.
One of the special characteristics of trading the AUD this month has been the consistent 'counter-intuitive' fake moves displayed each time the currency received positive fundamental inputs.
Several positive releases, going from retail sales, trade figures, ... to latest CPI numbers, should have forced shorts to temporarily vanish from the market, but instead, each time upbeat AUD news came about, it has simply served as an excuse to enter AUD short at better 'value areas'.
The characteristics of a healthy trend occur when the currency suffering the stampede of selling orders has a tendency to dismiss good news only to amplify losses when fundamental wind blow unfavorable.
This week serves as a perfect example, as Aus CPI-led gains were erased in the blink of an eye, while the China HSBC PMI (negative number but one should be aware of the high chances of the disturbed data due to early close of factories due to Chinese new year) sink the poor AUD.
To summarize, when technicals are combined by such 'counter-intuitive' fundamental swings, price is sending you a clear message hard to ignore.
While price action continues to scream selling the AUD each time buyers attempt to turn a well-established downtrend around, one should not overlook the fact that the currency has also been giving reassuring some clear signs that the sour sentiment is here to stay for the time being.
One of the special characteristics of trading the AUD this month has been the consistent 'counter-intuitive' fake moves displayed each time the currency received positive fundamental inputs.
Several positive releases, going from retail sales, trade figures, ... to latest CPI numbers, should have forced shorts to temporarily vanish from the market, but instead, each time upbeat AUD news came about, it has simply served as an excuse to enter AUD short at better 'value areas'.
The characteristics of a healthy trend occur when the currency suffering the stampede of selling orders has a tendency to dismiss good news only to amplify losses when fundamental wind blow unfavorable.
This week serves as a perfect example, as Aus CPI-led gains were erased in the blink of an eye, while the China HSBC PMI (negative number but one should be aware of the high chances of the disturbed data due to early close of factories due to Chinese new year) sink the poor AUD.
To summarize, when technicals are combined by such 'counter-intuitive' fundamental swings, price is sending you a clear message hard to ignore.