{"id":22685,"date":"2011-07-27T09:13:54","date_gmt":"2011-07-27T13:13:54","guid":{"rendered":"http:\/\/countingpips.com\/fx\/?p=22685"},"modified":"2011-07-27T09:13:54","modified_gmt":"2011-07-27T13:13:54","slug":"where-is-the-aussie-dollar-headed","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/fx\/2011\/07\/27\/where-is-the-aussie-dollar-headed\/","title":{"rendered":"Where is the Aussie Dollar Headed?"},"content":{"rendered":"

By Aaron Tyrrell<\/strong><\/abbr><\/p>\n

The answer is up. And down. Let me explain\u2026<\/p>\n

In mid-October 2010, the Aussie hit par with the US dollar. In November, it leapt that hurdle. And by May 2011, it hit a record high of US$1.10.<\/p>\n

Today it\u2019s at US$1.09621\u2026 And it could have its sights set on reaching new highs again.<\/p>\n

\"AUD<\/a><\/p>\n

Source: x-rates.com<\/em><\/p>\n

I asked Slipstream Trader<\/a><\/em> Murray Dawes this morning, \u2018Will the dollar go down from here?\u2019<\/p>\n

He said, \u2018If the US keeps printing money, I don\u2019t see why it can\u2019t hit US$1.30.\u2019<\/p>\n

Great news for online shoppers\u2026<\/p>\n

That\u2019s a price the Aussie hasn\u2019t been near since the mid-1970s (as you\u2019ll see on the chart below). But that doesn\u2019t make it a radical call\u2026<\/p>\n

The Aussie dollar success story is really a US dollar debt story.<\/p>\n

And right now, the US dollar is getting creamed around the world. At nine o\u2019clock this morning, the euro was buying US$1.4471.<\/p>\n

But US investor, Jim Rogers pointed out the spanner in the works that could halt the Aussie\u2019s rapid rise. \u2018The world doesn\u2019t have enough cotton for Bernanke to print all that money.\u2019<\/p>\n

Ha!<\/p>\n

I guess that\u2019s why some jokers online suggest the US mint a trillion-dollar palladium coin.<\/p>\n

Jokes aside, there\u2019s no doubt the US will try to print its way out of trouble.<\/p>\n

But even if it does\u2026 And Murray is right about the Aussie dollar hitting US$1.30 in the short or medium term\u2026 There\u2019s really only one way for the Aussie to go from here\u2026<\/p>\n

Look at this chart:<\/p>\n

\"AUD<\/a><\/p>\n

On the far right you can see the Aussie dollar is reaching highs against the US dollar it hasn\u2019t hit since 1983.<\/p>\n

Now look at the rest of this chart. You can see, every time the dollar hits a high against the greenback, it starts to drop. If it were to fall from its high \u2013 as it did near the end of 2008 \u2013 it wouldn\u2019t find \u2018support\u2019 until it hit 98 cents.<\/p>\n

I\u2019ve pencilled in some rough \u2018support levels\u2019\u2026 98 cents, 85 cents and 80 cents\u2026<\/p>\n

If the dollar were to have a mega slide\u2026 these are the levels it is likely to hit and have to break through. After that, the falls could get much sharper. BANG \u2013 to 70 cents\u2026 then 60 cents.<\/p>\n

All signs seem to point to the Aussie going down in the long run\u2026<\/p>\n

But, in the short term\u2026 As the US debt crisis grows more serious\u2026 And investors move to the relative safety of commodity currencies, like the Aussie and Canadian dollar\u2026 US$1.30 might be a good call.<\/p>\n

Aaron Tyrrell<\/strong>
\nEditor, Money Morning<\/em><\/p>\n

Where is the Aussie Dollar Headed?<\/span><\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

But US investor, Jim Rogers pointed out the spanner in the works that could halt the Aussie\u2019s rapid rise. \u2018The world doesn\u2019t have enough cotton for Bernanke to print all that money.\u2019<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-22685","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/22685","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/comments?post=22685"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/posts\/22685\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/media?parent=22685"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/categories?post=22685"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/fx\/wp-json\/wp\/v2\/tags?post=22685"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}