EUR/USD V AUD/USD

Another dangerous precedent was set by the analysts to forecast yearly price movements when in actuality most miss on any daily forecast. A few banks consistent year over year are Morgan Stanley, Dansk, Standard Bank South Africa, TD bank Canada, BNP Paribas. I like Societe General, UBS, Nomura Japan and Wespac in Australia but sometimes they hit, sometimes far off. New Year’s resolution is never read one person on the retail side. Overall, no reasons exist anymore to read research since I do my own.

Forecast are viewed in terms of EUR/USD because ranges are widest V counterparts, its most widely traded and EUR/USD correlations V other EUR pairs operate perfectly.

Means and high low ranges offered. EUR/USD Vs AUD/USD. From EUR/USD 1.0877

1 year mean 1.1013, High 1.1265, low 1.0761
2 year mean 1.0819, high 1.1216, low 1.0422.
3 year mean 1.1169, high 1.1759, low 1.0579
5 year mean 1.1343, high 1.1983, low 1.0703
7 year mean 1.2254, high 1.1379, low 1.3129
10 year mean 1.2630, high 1.3604, low 1.1656

AUD/USD V EUR/USD. From vital AUSD/USD 0.7264

1 year mean 0.7401, high 0.7725, low 0.7077
2 year mean 0.7394, high 0.7671, low 0.7117
3 year mean 0.7431, high 0.7967, low 0.6895
5 year mean 0.7650, high 0.8342, low 0.6958, Y negative on 3 and 5 year.
7 year mean 0.7867, high 0.8859, low 0.6875
10 year mean 0.7745, high 0.8788, low 0.6702.

AUD/USD prices operate correctly. Correlations V EUR/USD are good, no dramatic deviations exist, price sits on the line and why dead ranges seen over many weeks. Yet significant lows are approaching. 0.7117 is consistent with the 100 day average at 0.7186 as next vital break as well as 0.7264 daily price above. 0.7264 and 0.7186 are dynamic lines and move by the day. Both points dictate next direction and quick daily trade. Australia interest rates are stable, held in tiny ranges. Prior RBA statements state OCR will adjust if needed.
Australia and AUD is held hostage to remainder G10. Recoveries see AUD higher, failures then AUD drops further. AUD is caught between ECB and Fed Monetary policies. Who recovers first economically, FED or ECB. Does Yellen raise again. Iron Ore prices are on the floor, Mining investments still challenged, housing and labor in slight recovery but China PMI are dropping, causes lower exports. Further disaster must strike to see AUD hit the lows. Uncertainty leaves AUD more range bound.

Brian Twomey, Inside the Currency Market, btwomey.com

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