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Earlier Australian Dollar Outlooks

 

Outlook: Australian Dollar (AUD/USD)

New decline has been triggered

November 11, 2005

Chart of outlook for AUD/USD as at 11 Nov 2005

The drop through 0.7368 recently has confirmed the Aussie in a lower channel. This implies that the next major move will be down to channel support around 0.6950. Given that the March high at 0.7988 was below the November 2004 high of 0.8010, the next decline can revisit the September 2004 low of 0.6775.

This decline will not happen immediately because the time "vibration" is indicating a change in direction. For the past 5 months the Aussie has fallen so an upward reaction should be seen over the next month or two. I believe that rise will be no more than a pullback to retest the broken channel line around 0.7500.

The length of the time "vibration" is 5 months, so the low should be in place by April 2006.

It will take a rise through 0.7765 to confirm that the downside will be avoided.

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