AUDUSD 04/28/2017

2017-04-28_20-02-46

Charted above is my phasing analysis on the USDAUD currency pair. The reason why I chose to look at the inverse rather than the contrary is because of lack of clarity on the traditional AUDUSD currency pair. It seems evident that we are putting in a 18 year cycle peak at the time of this article and we are likely to drift lower in a swift fashion going forward. The projection line is correlated by almost 90% and we have reason to believe that such correlation is likely to continue going forward.

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Here is the projection on the more traditional AUDUSD currency pair. its important to note that volatility is likely to experience an uptick as the bottom falls out of the stock market and results in higher ¬†Gold prices. Many speculators believe that the AUD is correlated to risk appetite, this is simply not true since under most stock market bubbles the AUD was declining against the USD as is evident in the case of the dot come bubble going into to the 2001-02 low. Unfortunately most speculators and analysts alike suffer from long term memory loss. They believe it is related to risk appetite since it has been going higher since the 2002 low going into the 2007 peak and crashed with the stock market. The reason for such correlation is that the advance in all asset classes from the year 2002 to 2011 was liquidity driven first by the money printed for the Iraq war and the exceedingly low interest rate policy adopted by Alan Greenspan in response to the dot com bubble’s bust and second by the quantitative easing policy applied by the global central banks at the height of the mortgage crises. It is extremely evident and plain to see by the eye of the observer that the true correlation with the AUD lies in gold prices and not risk appetite. This makes it more of a currency that prospers during times of risk aversion! unless the rally in the equity market is liquidity driven. This is contrary to what most people say and there is good reason why most people lose in the financial markets!

In conclusion I would like to state that the AUDUSD looks significantly bullish going forward and this is due to a rise in Gold prices rather than a projected rise in the equity market which would be an absurdity at this point. Call options with long expiries should be purchased or puts should be shorted in this currency for many years to come.

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