29 Oct 2013
AUD bears back in mass, latest headlines tell 'story on sentiment'
FXstreet.com (Barcelona) - One interesting development in the AUD recently has been the consistent selling pressure it has been exposed to amid relatively uneventful headlines, a behaviour that suggests big market players are being heavily involved once again to reflect their bearish convictions on the AUD at these hefty levels, by either selling or taking profit.
As an example, last week the main technical development in the Australian Dollar VS US Dollar exchange rate was a big bearish engulfing candle on the daily chart. While market commentators were quick to attribute such move to 'Chinese banking default fears', the story alone was hardly believable to have cause such a panic selling on its own.
An over-positioned market, but most importantly, the conviction that the time had come again to sell the Aussie as it reached an important 'value area' (50% fib retrac 2013 fall), should have proliferated instead as the least illogical view to make some sense from the latest increase in downside volatility.
Another second example showing the renewed interest to sell the Aussie was clearly seen earlier today in Asia, when RBA Stevens gave some headlines with little substance overall, at least is was nothing new for those well-informed market participants. As Greg Gibbs from RBS, notes: "Stevens indicated with some force and confidence that even at levels before the recent recovery in the AUD (perhaps around 90 US cents per $A) he thought it was "unusually high".
Gibbs added: "There was nothing in these comments other than Stevens viewpoint on global market conditions that might encourage a lower AUD." One theory might be that the market is growing increasingly hesitant on a possible RBA intervention should the AUD/USD had continued its rise towards parity levels. Another reason for such a comeback by selling forces in the Aussie might simply have to do with macro/position/smart money traders returning at logical 'value areas.'
As an example, last week the main technical development in the Australian Dollar VS US Dollar exchange rate was a big bearish engulfing candle on the daily chart. While market commentators were quick to attribute such move to 'Chinese banking default fears', the story alone was hardly believable to have cause such a panic selling on its own.
An over-positioned market, but most importantly, the conviction that the time had come again to sell the Aussie as it reached an important 'value area' (50% fib retrac 2013 fall), should have proliferated instead as the least illogical view to make some sense from the latest increase in downside volatility.
Another second example showing the renewed interest to sell the Aussie was clearly seen earlier today in Asia, when RBA Stevens gave some headlines with little substance overall, at least is was nothing new for those well-informed market participants. As Greg Gibbs from RBS, notes: "Stevens indicated with some force and confidence that even at levels before the recent recovery in the AUD (perhaps around 90 US cents per $A) he thought it was "unusually high".
Gibbs added: "There was nothing in these comments other than Stevens viewpoint on global market conditions that might encourage a lower AUD." One theory might be that the market is growing increasingly hesitant on a possible RBA intervention should the AUD/USD had continued its rise towards parity levels. Another reason for such a comeback by selling forces in the Aussie might simply have to do with macro/position/smart money traders returning at logical 'value areas.'