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The Mentality Of Aussie Dollar

May 04, 2012 4:00 AM ET1 Comment
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Every forex traders out there seem to think that the best currency nowadays is the mighty Aussie Dollar. It seems to be getting the same mighty feeling like the way US Dollar used to get during its glory days. However, Australia is no USA. And it is not the reserve currency. Hence, today or tomorrow it will lose its lust. Everyone knows the difference between love and lust. US Dollar is always the love for central banks around the world. And, Australian Dolllar is yesterday's lust that is losing its value slowly.

Following is a chart I have drawn using my broker. One can easily see that the price is extremely bearish. When I say extremely I do not mean it will drop rapidly. I am saying that the price will gradually flow down that is better than highly volatile currencies.

The trendlines are nicely getting respected. I have a bearish position on this. The 1.0295 is the 61.8% on recent price changes. 1.01915 is the price I expect AUDUSD to reach by 1pm Tuesday coming. Unless there is any news or moving factors appearing before that time, it is almost certain. Slow and steady wins the race when it comes to Forex.

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