Goldman Sachs economist: Says Australia central bank may cut rates to 2% in 2013

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Dow Jones reports.

  • Says strong A$ will force RBA rate cuts
  • Goldman Sachs’ new long range Australia forecasts show growth through 2016

Meanwhile back at the ranch, AUD/USD trading at 3 month high of 1.0540.   Barrier option interest at 1.0550 looms.


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Gerry Davies


  1. First the call by their Prime FX division that AUD/USD will fall below parity – maybe below 0.90! and now their economist making similar comments. Is Goldman up to a “super trade”? Although, Thomas Stolper(er) is one the worst forecasters on the Street.


  3. Nearer term a$ outlook:
    No change as the choppy trade since Aug is seen part of a longer term topping below the ceiling of the large triangle/pennant that has been forming since July 2011 (see longer term). However, there is still no confirmation of a more important top, the seasonal chart points higher into the end of the year and may be forming a rising wedge/reversal pattern since Oct, with all suggesting another few weeks of ranging higher, before finally completing that more important top/Key support is seen at the bull trendline from Oct/base of the wedge (currently at 1.0330/45) while resistance is seen at 1.0495/15 (recent highs, ceiling of wedge) and 1.0590/15 (Aug/Sept high, ceiling of the large triangle).

    Long term outlook:
    Long held view of a large triangle/pennant forming since July 2011 remains in place, and with eventual declines to the base (currently at .9725/50) and potentially below favored. Note too the series of 3 wave moves in both directions (A-B-C’s), adds to this view, . But as discussed above, another few weeks of upward ranging below the ceiling, as part of a longer term topping, is favored first

  4. @Ricky – Kindly credit your source. Your comment should be in quotation marks as you have simply copied and pasted portions of David Solin’s analysis here:

  5. My guess was he was after a job. I was about to post my resume…

  6. @Petermacd…As discussed with Gerry. we are awaiting for a Guest Analysis slot at forexlive. Hope it is installed soon.

  7. Careful what you wish for…

  8. Slowly running up to the big pivot centred on 1.0556-1.0625. This includes (i) 76.4% retrace of the Feb/May ’12 decline, (ii) triangle resistance (i.e. the trendline connecting highs from July ’11 onward) and (iii) the reaction highs from 9th August and 14th September. Looking at weekly momentum, despite nearing its recent range highs there is little sign of any forthcoming exhaustion. The MACD indicator has contracted significantly, highlighting the markedly low average weekly price range and equally low short-end volatility. . So while timing may be difficult to calculate (in ’07 vols. remained at sub-8% levels for nearly 10-months), watching AUDUSD spot as it nears the big level 1.0556-1.0625 should be very interesting. :)


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