Peter Wadkins Thomson Reuters: Quote

As usual terrific and insightful words from a 43 year FX veteran and my long time and honored friend Peter.

No sphere of human thought in which it is easier to show superficial cleverness and appearance of superior wisdom than in discussions of currency and exchange. Winston Churchill 1949.

 

Brian Twomey Inside the Currency Market

AUD/USD: Levels, Ranges, Targets

 

 

When the RBA cut OCR August 15 to 1.5 from 2.0, AUD/USD traveled 250 pips from low 0.7500’s to reach 0.7757 within the month of August. Why the rise is explained by the negative 29% Correlation AUD/USD shared V OCR and Negative 29% Correlation to OCR’s counterpart in Overnight Indexed Swaps. Current 0.7500 AUD/USD price is located at the point of the August 16 announcement by the RBA. What changed.

After 1 month, Correlations normalized not only perfectly but AUD/USD and OCR on a 1 year basis share an up-slope trend line. The trend line reveals not only an extremely low AUD/USD price but massive supports exist at 0.7474, 0.7468, 0.7455, 0.7442, 0.7422. Supports are further reinforced not only by the trend line but OCR is low and severely oversold in monthly average terms.
The current base in AUD/USD is built upon 0.7191 and to move higher, AUD must break 0.7570. Along the way breaks must occur at 0.7544, 0.7553, 0.7557, 0.7563, 0.7567. The best target AUD can achieve today on a break of 0.7670 is 0.7580.
Today, the bottom is located at 0.7499. The big line break for AUD is found at a longer term trend line at today’s and overall dropping line at 0.7538. This level determines AUD direction over coming days.

What direction means is AUD’s uptrend begins at a break higher of 0.7591 and a point to see AUD/USD easily rise to middle 0.7600’s before overbought consideration.
A break below 0.7538 could see lower 0.7400’s before oversold factors to the price. The current strategy longer term regards the resolution of 0.7538. Short term and for the day long from the bottoms. For interested, trend line data is on my newly redesigned site.

 

Brian Twomey, Inside the Currency Market, btwomey.com

AUD/USD: Price Curve

 

To go higher, AUD/USD must break 0.7570. Maybe 10:00 am EST news forces the break.

AUD base = 0.7191. Rough supports  0.7474, 0.7468, 0.7455, 0.7442, 0.7422

To travel higher, 0.7544, 0.7553, 0.7557, 0.7563, 0.7567, Then 0.7570, 0.7575 and Max at 0.7580

A longer term MA exists at 0.7538 and responsible for dead price action.

To see uptrend, 0.7591 must break higher. Downtrend begins at 0.7485.

A break of 0.7591 could take AUD to middle 0.7650’s quite easily.

A Break of 0.7485 faces stiff resistance but bottom is lower 0.7400’s.

 

0.7191, 0.7898, 0.6953, 0.8170, 0.6902, 0.8230, 0.6753, 0.8411, 0.6588, 0.8622, 0.6430, 0.8833, 0.7567 ,0.7506 ,0.7659 ,0.7416

 

0.9542, 1.0480, 0.9225, 1.0840, 0.9157, 1.0920, 0.8960, 1.1160, 0.8741, 1.1440, 0.8532, 1.1720, 1.0040, 0.9960, 1.0162, 0.9840

 

http://www.mathportal.org/calculators/statistics-calculator/correlation-and-regression-calculator.php