The AUD/USD is one such currency pair where the USD could come rip roaring back to strength in the near term. The Reserve Bank of Australia has been hinting at a possible rate cut for a few months, and evidently RBA Governor Glenn Stevens is very bearish on the AUD. The better than anticipated CPI reading overnight helped stem a decline in the AUD, but that may not last long, particularly given the ferocity with which Stevens has stated his opinions. Central bank heads don’t typically say things just for the sake of saying them; they are very deliberate in the words they use and conscious of the potential impact those words may have. For that reason, it may be unwise to go against Stevens’ insinuation.
On the technical front, there are a couple of Gartley patterns that could point to a lower move as well. A shorter term Bearish Gartley pattern (red) completed near 0.78 which may help to form a potential Bullish Gartley pattern (blue) if price falls further toward 0.76. Typically, you wouldn’t want to predict that a Gartley pattern will complete, only looking to trade it once the pattern actually forms; but given the fundamental atmosphere, it’s not too far out of the realm of possibility to see the fundamentals help usher the technical in to the light.
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