An interest rate cut didn't do it. Weak economic data didn't do it. What will it take for the AUD to fall? Traders at investment banks are largely expecting a fall in AUD, based mainly on the drop in Australia's terms of trade - but nothing seems to knock the AUD down.

When the Reserve Bank of Australia starting cutting rates in November last year, the AUD/USD was trading around 1.0600. Now, 13 months and 6 rate cuts later, its around 1.0500.

Economic data since the start of the month is also weak. Retail sales, building approvals, company profits, current account and GDP numbers all disappointed. While jobs rose, the increase was in part-time postions. Admittedly, data out of China and the US is better than expected (supportive of "risk currencies" like the AUD), but the local data appears to have had no impact on AUD strength

Talking  to FX spot traders, FX Forward traders and FX Option traders is enough to have AUD bulls reaching for the knife. Over the next 3-6 months, they are almost universally bearish, with many looking for AUD/USD levels around 0.9300 to 0.9500. Their argument is based on a fact highlighted by the RBA - Australia's terms of trade are down 15% from the peak, yet the AUD is less than 6% below its corresponding high point.

Yet the AUD still won't fall. Have a look at the charts:

AUD/USD Daily

20121210 audusd

Source: CMC Tracker

Note how close the pair is to the top of the triangle at 1.0488. Trading through 1.0500 would very likely spark technical buying. And its not just AUD/USD:

EUR/AUD Daily

20121210 euraud

Source: CMC Tracker

Note the cross in the two week vs two month exponential moving averages. And the breach of support at 1.2367.

This is not my trade. The fundamentals and technicals are pointing in different directions. However, the persistent strength of the AUD, and the chart patterns developing, could see technical traders Buy AUD/USD and Sell EUR/AUD.