Has anyone else noticed that the price of iron ore has in a couple of weeks gone from a celebration of the robust strength of the Australian economy to the chink in the armour of Australia that is being discussed in the financial press around the world. It would be easy to join the party and relish kicking the economy with everyone else - instead let's relax with a coffee and look at the chart.
This is an instance where I would like to take a fairly simple view of the chart but point out some of the key levels at which we could see more selling pressure or buyer support.
The main thing to look at here is the historical responses to the 50 Day MA. You can see that successful breaches of this level have often been telling in a shift in the wider direction of the market. The 200 Day MA is historically less telling for the Aussie but what's worth taking note of is the fact that it is moving pretty much horizontally. This gives you a head-up that mean reversion is likely and we are within a small number of pips of being there.
Certainly Jackson Hole (and I think more importantly the ECB) are going to be telling as to currency direction in the near future but it does appear that the AUDUSD is at a potential turning point now that may see the bottom end of the range tested given the right drivers from the fundamental side of the equation.