- A plunge lower for the Australian Dollar to start October having already been weakened through latter September, as the Australian economy continues to weaken with risks growing for a possible rate cut.
- This has echoed ongoing, global geopolitical concerns from the US-Sino trade war, the Chinese slowing of economic data, Middle East tensions and the Trump impeachment enquiry.
- The early October plunge to a new multi-year low (lowest since 2009) also reflects a negative technical analysis theme, as described below.
AUDUSD: Intermediate-term bearish shift
We have stressed in recent reports to our Market Chartist clients that “we see an intermediate-term range as .6895 to .6685, BUT with risks for a bearish shift below .6685” and the plunge through here t start October sets an intermediate-term bear trend.
Furthermore, the surrender of .6685 ad .6673 to a new cycle low on Tuesday reinforces the failure back from below the down trend line from mid-September, to keep the bias lower Wednesday.
- We see a downside bias for .6692; break here aims for .6668 and .6651.
- But above .6734 opens risk up to .6776/81, maybe .6806/09.
Intermediate-term Outlook – Downside Risks: We see a downside risk for .6500.
- Lower targets would be .6281 and .6009/00.
- What Changes This? Above .6809 shifts the intermediate-term outlook back to neutral; above .6895 is needed for an intermediate-term bull theme.
4 Hour AUDUSD Chart