Wednesday, 30 May 2012

Possible short term corrective move for Aussie?

Peeps,

As we have seen through the whole of the month of May, only one word to describe it; HeLL. However, no doubt the sentiment now is very bad, most of the risky currencies have beaten down so badly, that only safe haven like US$dollar is the only currency outperform most out there. However, we are approaching June, and traditionally June is the month that many events will shape the second half of the year.

One pair that were identified with potential of a relief correction is AUD USD. Anyway picture tell a thousand words. Below is the possible Head and shoulder formation possibly forming this week.

Possible Head and Shoulder for AUD/USD (1hr Chart)
As i had identified in late April of the possible downfall for Cable (GBP/USD), this AUD/USD is identified to do the opposite after a very bad month of May. Of course there is still high possiblity that it will move lower to the previous low at 0.96898. However, judging from the price action in equities this week, a possible short term relief maybe on the way.

Perhaps fueled again by QE? Nevertheless, if this Head and Shoulder formation is true, this pair may recover back to $1.00 again by short covering or temporary correction before moving lower in the mid and long term forecast.

Cheers,

Renomic

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