Aussie Battering Is An Investors Blessing (ADE)
January 28, 2010 8:26 PM
The recent rally in the USD has finally caused the very resilient, Australian Dollar to move to levels not seen in over a month. Based on the extreme volatility of the last few weeks it would be irresponsible of me to pick a near term direction for the AUD/USD. Having been a staunch Aussie bull I too see the Aud/Usd potentially moving down to levels not seen since September 2009. However, I see this as a great opportunity to start building positions again. While the .8500 would be an ideal level to Buy, I see strong support at the .8750 area. A lot of the movement against the Aussie has more to do with the fear of Chinese monetary tightening than the start to a real USD rally. Once the true intentions of The Peoples Bank of China have been realized, I feel we will see the Aud/Usd work its way back to eventually testing the .9500 area by the middle of the second quarter. Since the need for Australian raw materials by China is constant and only growing, I expect to see the Aud/Usd to return to its former glory in the weeks ahead.
