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Australian Dollar special report

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AUD and Markets Flash

Wed, Sep 3 2008, 06:18 GMT
by Clifford Bennett

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Yesterday we suggested the market could experience an exhaustion phase to .8290 or even .8010. So far we have had a low of .8270, but then quite a good bounce of 120 points, before again settling in a heavy way toward day end.

Scenario is much the same as yesterday, the market looks heavy in an immediate .8280 .8350 range. Minors .8300 .8330. A recovery of .8350 would be a little encouraging of a possible bottom scenario, but have to respect the continued immediate downward pressure while that level contains.

While there is further risk toward .8010 as a worst case scenario, tend to favour .8210 perhaps .8270 holding.

There was no doubt oil was going to have a bad day yesterday as the full trading of “no storm sell oil” flowed through the market. This helped the US dollar to new highs, but this may not be sustainable. Favour nibbling at going long Oil today, more comfortably tomorrow, like buying Gold on the day, and equities continue to work a range that should build for a sustainable up-trend. Dow Jones in bullish consolidation while 11,200 holds.

GDP in Australia today was as we expected, and the RBA will continue to cut rates. The market is however very short the Australian dollar now. While looking for a low in the AUD, am not keen to pre-empt the bottom, and will wait for signs of encouragement such as a recovery of .8350 and especially .8410.

Australian Dollar


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