Starting with this chart…
After the continuation of an entire month of gains, it has finally become good and comfortable to buy dollars again – a confluence of both fundamental risks of the global economy dragging and the European debt crisis far from being solved and with no one yet to actually write the check. In this case, it is almost a completely wonderful point to start selling risk again.
Taking a look at any dollar-cross chart, there is almost the same pattern – a month of gains in October as expected (reflecting risk appetite in the equity markets as well) and technicals are showing good sell signals. Although the chart may be a bit outdated after the Bank of Japan intervention and subsequent rush to get enough dollars to tender the Bank of Japan’s offer.
Nevertheless – trying to get out of the office, look for the calendar events affecting the Aussie this week – including the all important RBA rate decision. 15/26 analysts are seeing a drop to 4.50%. Although it may not be at this meeting since Glenn and co have been quite dovish but not yet to that degree. Let’s see when and where. GEDDAN to parity!
To the best of good buys.