What’s next for the Australian dollar? It probably has more room on the downside.
The team at Morgan Stanley provides 3 charts and various targets for the Aussie $:
Here is their view, courtesy of eFXnews:
Morgan Stanley picks AUD/USD as its technical FX chart of the week, where MS is bearish and looking to chase to the next downside targets.
On the long-term AUD/USD chart:
“AUDUSD has broken the key 0.8315 level which was the bottom end of recent trend channels, giving a further bearish signal. Now AUDUSD has crossed the 50% retracement (0.8546) of the Cwave, the next level to target initially is the 61.8% retracement at 0.7947.Staying below the trend channel keeps the bearish outlook,” MS notes.
On the 2-year AUD/USD chart:
“AUDUSD is currently within the (5)th wave within the larger C-wave. The substructure suggests that we are in the 3 rd wave, indicating further downside before a correction higher. Staying below 0.85 keeps the bearish momentum. AUD positioning is fairly light, opening the way to further downside. The 0.80 level may be a key psychological level to watch,” MS argues.
On the 90-day AUD/USD chart:
“We remain bearish on AUDUSD, which is currently in a 5 th wave. Upon completing the iiird wave, we would expect retracements to be limited to the 0.84 area. A move above 0.8643 (i) low would suggest a different wave count and a possible further correction higher. We target 0.7600 for the end of 2015,” MS projects.
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