AUDUSD - On the move to eventually hit 50c

The Australian elections are finished and so is its economy. With an economy built on exports of iron ore to China, and a semi-self-sustaining housing bubble looking for a pin This is a pretty simple long term trade. Don’t hold Aussie dollars, or get short them.

Looking at the technicals though, on the weekly there is a down (purple) that has been guiding this fall for some time nw. After cracking the .70c mark last week there are not many lines of support holding it until it reaches .64c in about September, and then its non stop to .50c. I think that the .50c level will come in a hurry, likely bought about by economic pressures.

It is worth noting however, that where its at at the moment is a support level, so I would be waiting to see 66 before I call this going all the way.

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Perhaps its worth noting, there is a fairly close correlation between the Australian 10 year bonds and the Aussie dollar (obviously). The bond yields on the 10 year are slowly making their way towards zero so as long as the RBA keeps cutting rates expect the Aussie economy to continue its slow grind to the dirt.

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