Audusd:Investing.com - The Australian dollar traded slightly lower against its U.S. rival during Friday’s Asian amid speculation the Aussie is poised to fall back to parity with the greenback.
In Asian trading Friday, AUD/USD inched lower by 0.06% 1.0086. That took the Aussie through old support at 1.0165. It now faces resistance at 1.0307, the high of May 6.
An Australian press report out Friday revealed parity between the Australian and U.S. dollars is becoming a legitimate concern. That news comes on the heels of the revelation earlier this week that billionaire financier George Soros has taken a large short position in the Aussie.
Soon after the news about Soros shorting the Aussie broke, hedge fund manager Stanley Druckenmiller also announced a bearish view on the Australian dollar. Druckenmiller made his comments at the Ira Sohn investment conference in New York.
Friday’s slight weakness in AUD/USD comes just a day after data showed the number of employed people in Australia rose by 50,100 in April, official data showed, far more than the expected 12,000 increase, after a 31,200 decline the previous month.
A separate report showed that Australia's unemployment rate ticked down to 5.5% last month, from 5.6% in March. Analysts had expected the unemployment rate to remain unchanged in April.
Earlier this week, the Reserve Bank of Australia lowered interest rates to 2.75% from 3%, perhaps in an effort to give Australian exporters some relief from the strong dollar. The Australian dollar has been the best-performing developed market currency against the greenback since the global financial crisis.
16/05/2013
- The AUD/USD finished the session slightly lower, down 16 pips at 0.9880. It was a volatile day for the pair which at one point traded as low as 0.9852. The economic calendar in the coming session will be limited to the RBA Foreign Exchange Transaction release due out at 1:30GMT. However, the US Calendar will be extremely busy with CPI, Housing Starts, Building Permits, and the Philadelphia Fed Survey all due out in the coming session.
From a technical perspective, the longer term trend remains lower and the pair is sitting just above a critical support trend line (0.9880) which is the lower boundary of a massive ‘pennant’ pattern which has been forming since late July 2011. However, in the short term a counter trend bounce may be due.
Looking at the 1 hour chart, it appears an inverse head and shoulders bottom is forming which could help send prices back up towards the 0.9990 level (note the pair would need an hourly close above the neckline at 0.9920 to confirm the pattern). Furthermore, there are a number of bullish divergences setting up between price and momentum (RSI) which may be a sign that downside momentum has run out for the time being.
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