The view on USD: Gaining strength to strength due to risk aversion and flight to safety against most major currencies. More strength expected in the months ahead. Most currencuy experts say a safer way to play the currency markets over the next 6 mths would be to ride on the strength of the USD.
The view on SGD: Ongoing economic deterioration, MAS "zero appreciation
policy".
The view on AUD and NZD: Global economic slowdown reduces demand for commodities and raw materials, the backbone of Australian and NZ economies. Lower interest rates in these two countries.
Putting it together: If S$ expected to weaken against US$, but AUD and NZD expected to weaken further against S$, should I not long USD/ AUD or USD/ NZD?
The technical picture: AUD set a low of 0.6055 against USD on and NZD 0.5493 against USD on 24 Oct. Can I get in now?
Chart Formation: Double Top NZD (0.6630 neckline) and Straight line plunge AUD (0.7650 support)
LT Trend for both currencies: Down (200-MA)
ST Trend: Down (10 and 20D MA)
ROC: <0
Alternative view: Use 50D by 100D crossover, but that occurred long ago on 30072008.
What to do now: NZD/USD looks friendlier to short, but wait for a move back up near 0.6630 neckline.
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