Goldman: Australian dollar to retest 0.68 cent lows

Via Goldman today comes some technical analysis:

The market is in a 5th wave of a sequence that started at the ’11 highs
  • In short, this could be interpreted as the Vth wave of a sequence that started at the ’11 highs. Going back historically, wave IV began in Jan. ’16, and formed a clean ABC counter-trend advance, targeting 0.8168 (the high reached 0.8125). The sell-off since Jan. ’18 has looked fairly impulsive, increasing confidence in the theory that this is in fact a Vth wave.
  • At very minimum a wave 5 will typically retrace the full extent of its move since the bottom of wave 4 which in this case would mean re-testing the lows from Jan. ’16 at 0.6827. It could also eventually extend as far down as 0.6432 (if equal to the length of wave 1).
  • Initially focused on the Jan. ’16 low at 0.6827. Scope to eventually reach 0.6432

My own view is that Elliot Wave theory is voodoo but there you go. I still think that the fundamentals point us this way given markets have are already moving to price a US slowdown but not the looming Chinese version.  Our house view is that won’t deliver enough stimulus until it sees the economy slowing markedly in a rerun of 2015.


  1. Macrobusiness members, are you happy with your subscriptions? Is whats behind the paywall worth the money? Santa might be giving me a xmas present but he isn’t sure if he can make it yet…

    • Of course I am. I would be still paying,even if they open all posts. What else is out there to pay?

    • It’s well worth it, do it!
      MB is fighting the good fight and should be supported.
      Better comment section also as fewer annoying trolls.

      • Once you can read all the member articles you will want to quit your job and emigrate anyway…!

    • I’ve paid for a subscription since day 1, never regretted it and intend to continue. Of all the news services and blogs in the world, it’s the only one I subscribe and contribute to.

      I wouldn’t miss it for quids. Do yourself and Leith and David a favour, and hand over a few shekels to keep it going. Analysis like this doesn’t grow on trees.

    • Of course.
      I incorporate elements of MB perspectives in advice to my clients. It is much appreciated perspective.

    • Payed up even before you had to. World class and have made significant gains even in a poor year. It’s a no brainier both at an individual level and for the nation

    • Yeah. Yeah probably would still pay even if i didnt have to- ljke Martin norths patreon program kind of thing.

  2. If oil goes under $40 it’d be a bit of a worry for markets ??
    It’s not far away
    And with AUD 72c and oil $46, you’d expect prices at the tank to be around $110/20 litre

  3. Happy with my Sub, Australian focused, politics, social and financial, with some international obs.
    Also its daily, M to F + weekend, with several articles per day.
    Unfortunately the Australian public are very illiterate, Financially and Politically, from my social observations.
    All Australian students should have MB access, to get them thinking, would have to clean up the comments section though 🙂