Regular readers will not be surprised if the topic for this morning is the Aussie dollar. We have been anticipating its decline for some time but, much in the manner of the writer Mark Twain who, when his obituary was, erroneously, printed in a London newspaper, is reported to have said “Rumours of my demise have been greatly exaggerated”, it might be only now that our words are bearing fruit.
On this occasion the Aussie has gone well below its 200 Day EMA and is now moving down through the solid second level support that existed at the nice round figure of 0.92.
All this happened very quickly, particularly in light of the pronounced rise that took place in the closing days of last week.
Of course, one move down like this does not constitute a downward trend, but it could be the start of one.
A tale of two hemispheres
What is interesting is the fact that the Canadian dollar seems to be getting a boost of its own on the back of the strength of its neighbour in the North American continent, the Greenback. This is at the same time that the efforts of the New Zealand Central Bank have been directed at devaluing that country’s currency.
The NZDCAD pair is, right now, grappling with its own support level at 0.905.
The world markets almost seem to be lumping the Kiwi in with the Aussie in the same manner as the CAD is getting a lift from US dollar sentiment. This is of particular interest as the Canadian in a commodity currency, and commodities of all sorts are under pressure at the moment.
In contrast to the dog days of summer at the end of July and the start of August, when the market was well and truly in the doldrums, it now looks like it is, once more, game-on for Foreign Exchange trading.