Australian Dollar special report
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Australian Dollar struggles even with RBA support!
Tue, Oct 28 2008, 05:47 GMT
by Clifford Bennett
FxMax
Key support .6005, key resistance .6160, on the narrow .6025 .6100.
Most likely form is bearish collapse, .6005 being key.

The price action remains heavy into RBA buying as forecast, and there is a real and immediate threat of a sharp collapse if the RBA is forced to step aside, as in my view it should. This would allow the market to find its own more natural equilibrium at a lower level, and that is when intervention would be more effective. As long as the USD is firm the AUD will remain under pressure. A lot of the pressure is coming from the continued unwinding of the Yen carry trades. There is a lot more AUD selling on that basis still to be done.
Technically the market needs to recover resistance at .6225 to signal a low is in place. Until then rallies should be treated with caution. Immediately on the day there is resistance at .6160 and .6100. A move above .6100 should see some stop loss buy orders triggered toward .6160, but getting above .6100 may prove difficult. People who need to sell, seem to be lining up there to take advantage of buyers providing liquidity by betty with the RBA.
Favour the downside from here, but would step back a little from that view if it recovers .6100. More likely is the RBA being pressured into stepping aside for one last collapse to 57 or 55 cents before a sustained and major up-trend commences.
Published on
Tue, Oct 28 2008, 06:30 GMT
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