Weekly Forex Report 10/5/2012
Thursday, May 10, 2012, 04 : 53 PM
4c drop too fast and too deep for AUD - LTG GoldRock FX Market Report
No matter how you shake this cocktail a 4c drop is somewhat too fast and too deep for the Aussie dollar! So a pull back to somewhere around 1.0120 – 1.0160, is on my cards and once again. Our traders will re-sell it when it breaks again the 1.0100 is the game plan.
Yes I still hold the view the Aussie will be back at 0.9450 before the end of July but a drop this quick and this sharp is are sure fire signal that bulls will coming running. Put on top of that the fact the Dow Jones has had 6 days of consecutive declines, there will be a short rally in the next 48 hours in my view.
Greece and Europe is gorging itself on more and more debt and this is going to be a very long drawn out struggle that threatens Europe’s already fragile economy. The European Central Bank will again be pressured into buying up national debt to lower bond prices and more talk of a Euro Bond will surface again also.
I will remind you that Spain will shortly be raising the white flag and when it does the Euro will sink again. Today traders were nervous and selling due to Spain having to put aside $45 Billion dollars to save its own banks. Spain’s stock market dropped today to a 9 year low as unemployment rises and growth slides.
The economics news in the US was also weak and the Dow Jones at one stage was down over 100 points but recovered to close down 97 to make it 6 straight days of declines on the US top 30 stock index.
But when everyone on the street starts to get the word the markets are falling, it is time to buy and whilst the rallies will be sold again, it is a traders market!