Growth concerns are mounting in Australia. As the housing market looks increasingly shaky, businesses are failing in droves. Weaker economic growth should lead to lower long-term rates. I expect weakness in the currency as capital flows out of the country, or as foreign investors in illiquid Australian investments hedge their currency risks.
Looking at the long term NEoWave pattern for AUD/USD there is a case for a correction to around 0.80. Regardless of whether you count the advance from 2009 as an Impulse or a Double Combination, the advance needs to be corrected. Targets for the correction range from 0.90 down to 0.80. Stops can be placed at 1.0612.
Long-term puts on ETF FXA can be used to short this currency pair. Professional Investors may consider buying long-term Australian Government Bond Futures in anticipation of lower long-term rates.
Looking at the long term NEoWave pattern for AUD/USD there is a case for a correction to around 0.80. Regardless of whether you count the advance from 2009 as an Impulse or a Double Combination, the advance needs to be corrected. Targets for the correction range from 0.90 down to 0.80. Stops can be placed at 1.0612.
Long-term puts on ETF FXA can be used to short this currency pair. Professional Investors may consider buying long-term Australian Government Bond Futures in anticipation of lower long-term rates.
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