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Many Forex traders, from those fresh off the block, to those who have been around for years, often forget that to survive over the long haul, common sense is a "must." However, when we're in the trees, we often find ourselves unable to see the forest. With a common sense approach, traders of all levels will find the "true paradigm" of profitable Forex at their fingertips. Using a common sense approach, traders will learn to spot future trends, often, before they ever even appear.

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Known as the "Black Knight" in trading circles, Andrei Pehar is a private fund manager, consultant to management, and a sought-after speaker, trainer, and coach for professional traders and individual investors alike. He's also founder and Sr. Currency Strategist at fxKnight.com.

His client list includes prestigious names such as UBS, Tower Asset Management (named by Bloomberg as top asset manager), Clifford Associates (investment counselors since 1915, officially acknowledged as the oldest in the United States), and several other high profile firms specializing in investment and wealth management for musical artists, sports celebrities, and other ultra high net worth individuals and trusts. He is the author of "Trading Forex for Living", published by Harriman House

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Has The Aussie Found Bottom?

Posted 20:06 22 October 2008 | 6

The AUD/USD pair has shed over 3500 pips in a dramatic sell-off which has lasted since July. Have we finally found a bottom?

Currently, the Aussie is ranging between the 161% Fibonacci level at 0.6537 and the 138% Fib level at 0.7019 - what happens next very much depends upon which side of this range price eventually chooses.

If we break above 0.7019 and successfully re-test that level as support, then we may eventually see price rise to 0.7801

If, on the other hand, 0.6537 fails to hold as support, and we successfully re-test that level from below as resistance, then we could well see price drop further -perhaps as far as 0.5755, or if that level breaks, then 0.4491

Comments (6)

0.4491! What are your thoughts on that? Do you think it's likely, even though it was at 0.90s earlier this year?
peachy3 | Posted 22:44 22 October 2008
Well, there's intense pressure on commodities, and the AUD is considered one of the "commodities currencies" due to the exports from (gold among them). It also looks like Asian economies are going to follow the rest of the world down into recession. On the other hand, the US Dollar is now heavily over-bought, and there was never really anything fundamentally behind the recent rally to begin with (US debt is still soaring, GDP still declining), save for the sudden demand due to the liquidity crunch and large funds needing to raise cash (basic supply & demand). A reversal could come at any time. I can better speculate about 0.4491 if/when we get to 0.5755 - one step at a time. For now I'm closely watching the 0.6537 level to see whether it can hold as support (it has twice now so far), or whether we will break below and then re-test that level from underneath as resistance.
BlackKnight | Posted 10:29 23 October 2008
I suspect the AUD will keep falling against the USD for a month more at least. The Australian economy is still doing pretty bad, (aren't we all) but I'm not expecting the AUD to bounce back anytime soon. You gave me alot of insight in the 2nd comment, thanks for that man :)
jawnlooi | Posted 11:20 25 October 2008
excellent your comment do you have anyone else and where? elomaleza from chile
elomaleza | Posted 21:51 27 October 2008
I hope with USD being so over-bought the trend will correct and maybe Aussie will try to raise, the downfall might stop, do you think it will?
anouka | Posted 21:24 19 November 2008
I do believe the current USD rally to be a temporary one - the reason being is that the fundamentals really have not changed (GDP is still declining, national debt still growing). What we have now is a liquidity crunch - and cash is subject to the same rules of supply & demand as everything else. Meanwhile for the AUD, what would really help it along is commodity prices starting to stabilize. In the short-term, further recession/deflation is expected, however looking more long-term it is quite likely that we'll go through an inflationary period in the years ahead.
BlackKnight | Posted 05:05 20 November 2008

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