The Australian Dollar is declining after breaking primary support at $0.885, offering a long-term target of 80 cents*. Exporters and import replacement industries on the ASX will benefit from the weaker Aussie Dollar in the long-term, but the short-term impact is negative, with overseas investors retreating from the market.
* Target calculation: 0.885 – ( 0.97 – 0.885 ) = 0.80
The ASX 200 is heading for a test of support at 5200. Breach is likely and would signal a test of primary support at 5000. Declining 13-week Twiggs Money Flow indicates selling pressure. Recovery above 5400 is unlikely in the short-term, but would signal a primary advance, with a long-term target of 5800*.
* Target calculation: 5400 + ( 5400 – 5000 ) = 5800
The MONTHLY momentum of the XAO appears to be about to cross the zero line to the downside and to me suggests extreme care. john
Correction: “Exporters and export replacement industries” should read “Exporters and import replacement industries”.