The fall of the Australian dollar against the American dollar last month was sensational (nearly 7%), but widely anticipated on these pages and not so unexpected. At the moment AUDUSD is positioned exactly on the low of the beginning of this year at 0.8660, making a technical rebound phase possible for the Aussie. This consideration also arises from the cyclical window (28-29 weeks) which will open in late November and early December, and that is intercepting some primary tops within the bearish trend in progress rather reliably since 2011.
This element suggests us that namely any rebound will have to be used to lighten the exposure to AUD.
The upper graph shows us in fact the percentage of overvaluation against the U.S. dollar by AUD in terms of purchasing power parity. We are still at +20%, too much for an economy that is witnessing month after month the destructions of raw materials prices; attention to the meeting of the central bank this week (Chart source: Bloomberg and Metastock).
This element suggests us that namely any rebound will have to be used to lighten the exposure to AUD.
The upper graph shows us in fact the percentage of overvaluation against the U.S. dollar by AUD in terms of purchasing power parity. We are still at +20%, too much for an economy that is witnessing month after month the destructions of raw materials prices; attention to the meeting of the central bank this week (Chart source: Bloomberg and Metastock).
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