13 Dec 2013
Flash: EUR/AUD next target at 1.61 - ANZ
FXstreet.com (Bali) - After a break above resistance around 1.52 - 38.2% retrac of the down move since late 2008 - EUR/AUD should now target 1.61 - 50% fib same move - , notes Brian Martin, European Strategist at ANZ.
Key Quotes
"1.61 look feasible particularly given the intensification of negative AUD rhetoric from RBA Governor Stevens. He would like to see the AUD around 0.85 cents against the USD and the reasons why the RBA want the currency weaker are well documented."
"The announcement by General Motors to cease production of vehicles and engines in Australia by
2017 reflected the grim economic reality facing certain industry sectors and AUD overvaluation was
cited as a significant factor in the decision to cease production. Estimates of AUD overvaluation vary widely, but IMF estimates of 10% overvaluation when AUD/USD was around 0.94 cents would put fair value estimates for the AUD at 0.85 - consistent with RBA Governor Steven's suggestion."
"Ongoing concerns over the medium-to-longer-run outlook for Chinese growth, expectations of weakness in key Australian commodity prices and a further deterioration in the terms of trade are additional factors weighing on the currency."
Key Quotes
"1.61 look feasible particularly given the intensification of negative AUD rhetoric from RBA Governor Stevens. He would like to see the AUD around 0.85 cents against the USD and the reasons why the RBA want the currency weaker are well documented."
"The announcement by General Motors to cease production of vehicles and engines in Australia by
2017 reflected the grim economic reality facing certain industry sectors and AUD overvaluation was
cited as a significant factor in the decision to cease production. Estimates of AUD overvaluation vary widely, but IMF estimates of 10% overvaluation when AUD/USD was around 0.94 cents would put fair value estimates for the AUD at 0.85 - consistent with RBA Governor Steven's suggestion."
"Ongoing concerns over the medium-to-longer-run outlook for Chinese growth, expectations of weakness in key Australian commodity prices and a further deterioration in the terms of trade are additional factors weighing on the currency."