NAB: Australian dollar to keep falling over next year

Via NAB comes technical analysis for the AUD:

Medium Term Price Drivers

• Since breaking the two- to three-year uptrend in April price has broken below the H2 2017 low at 0.7502 in four separate weeks but failed to close a week below 0.7502. A close this week below 0.7502 will confirm the break of the MT uptrend and renew a MT downtrend bias.
• Last week’s retest of broken 2-3 year uptrend at 0.7665/85 and high of 0.7677 confirmed that the MT uptrend is broken.
• Weekly close below 0.7502/09 targets a multi-week to multi-month decline, initially towards 0.7320/30.

Medium Term Momentum Drivers

• Weekly RSI has broken its multi-year uptrend confirming a renewed MT downtrend bias.

Long Term Price Drivers

• January produced a failed new multi-year high and subsequent bearish reversal, setting up an impulsive decline and break of the two- to three-year uptrend.
• Next major support where the May 2017 low coincides with the 61.8% retracement of the 2016/2018 uptrend at 0.7320/30.
• A monthly close below 0.7320/30 will imply a full retracement of the 2016/2018 uptrend to 0.6800/50. Long Term Momentum Drivers.
• LT momentum failed to make new highs with price in January confirming the failing LT uptrend.
• Monthly MACD recently produced its first LT downtrend confirmation since early 2016.

ANZ too:

The AUD lacks any catalyst to pursue a sustained move higher, not least because the domestic data flow remains uninspiring from an RBA rate hike perspective.

• The global environment will continue to dominate moves.
• While positive sentiment should see the AUD outperform, the threat of a trade war means it is hard to bank on a sustained relief rally.
• Risks around the housing market may also weigh on the Aussie.

The MB price target for year-end remains 70 cents then materially lower again next year.

David Llewellyn-Smith is the chief strategist at the MB Fund which is overweight US equities. The first option is to use the MB Fund International Stocks Portfolio which is always 100% long as a part of your own asset allocation mix. The second option is to use an MB Fund tactical allocation in which we choose the asset mix for you, including exclusively international stocks, but with bonds and other assets as well to ensure a more conservative mix.

The recent performance of both is below:

If these themes interest you then contact us below. 

The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance.