Australian Dollar: "Still Surging" -- Why, Again?
This is a story we've seen repeated in the forex markets again and again.
July 20, 2012
By Elliott Wave InternationalPicture this. It's late May. You're in Australia. You have an interest in the currency markets: Maybe you speculate in forex; maybe your business depends on the exchange rates.
Every morning, you scan the headlines. This is what you see regarding the Australian dollar during the last week of May:
- "Aussie dollar sinks to eight-month low"
- "Little long-term support for Australian dollar"
- "Poor data slams Aussie dollar"
- "Aussie dollar drops as investors seek safe-havens"
- "Australian Dollar Down After Retail Sales Slip"
- "Weak China PMI Sinks Euro, Australian Dollar"
...and now, six weeks later, the AUD is orbiting the moon. Yes, between June 1 and today, against the U.S. dollar the Aussie dollar shot up from near $0.96 to over $1.04, despite all the "bad fundamentals" from late May.
This is a story we've seen repeated in the forex markets again and again: Right when everyone accepts the trend (bullish or bearish) as "the new normal," the trend reverses.
We are proud to say that we don't follow the herd off the cliff each time they head that way -- because we have the right forecasting tools. On June 1, our Senior Currency Strategist Jim Martens published this bullish AUD/USD forecast (excerpt; some Elliott wave labels have been erased for this article):
This bullish forecast was based strictly on the Elliott wave picture in AUD/USD charts. Jim simply saw that the pair had reached the bottom trendline of the likely "triangle" Elliott wave pattern, so a strong rebound was due in the next wave of the pattern.
Excerpt from the June 1 forecast: "...AUD/USD is forming a corrective setback, either a flat or a triangle...to be followed by another push above [price target]"
Today, after 6 weeks of rally, the AUD is "still surging," as it has become "an attractive investment." But you already know how rapidly this tune will change once the trend reverses.
Jim Martens has the near- and long-term AUD/USD price targets inside his Currency Specialty Service for you right now.
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