Aussie dollar just hanging on or ready to rumble?

See the latest Australian dollar analysis here:

Is the Australian dollar an America, Europe or China proxy?

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by Chris Becker

The Aussie battler broke through a significant low overnight, hitting 80.30 against the USD, taking out the monthly lows in mid-2010 (Greek Crisis Mk.1 remember?) and back to almost post-GFC bottom lows in early 2009:

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It wasn’t just USD of course, as the faithful predictor of safe harbor abandonment – AUDNZD – also popped a new nearly 20 year low, seemingly on it way to parity with its junior South Pacific partner:

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AUDNZD is currently just above 1.04 in early trade this morning, with AUDUSD at 80.80, rallying post FOMC minutes release from this morning, and possibly in anticipation of a solid building approvals number coming out very soon.

The weekly chart of AUDUSD shows a deceleration of the downtrend and the daily is showing rising momentum divergence (indicative of a potential upswing) and long tails under support, indicating a lot of buying at just above the 80 handle.

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There is a possibility, given the lack of RBA signals until February, and coupled with an iron ore rally, and later this month a ECB led risk-on move that Aussie could rally significantly from here.

My upside targetĀ could be as high as 85 cents, which sits the AUD in the middle of the range but below former support that held all the way through 2013 and 2014.

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