By Ric Spooner, Chief Market Analyst, CMC Markets Australia The capital expenditure numbers were terrible, the Aussie got slammed and many have been calling it potentially much lower. In the short term though, chart set ups are saying we could possibly get a bounce. Daily chart After being poleaxed by the capex numbers, the Aussie stopped at the 78.6% Fibonacci retracement level. This is often seen as the last line in the sand. If price falls significantly below this retracement level the downtrend is less likely to be a retracement and more likely to be part of a major move lower Source: CMC Markets Hourly Chart As I write, the hourly chart is completing a 3 drives to a low pattern, potentially confirming the prospects of a bounce off the 78.6% retracement. One of the main features of this pattern is that the 3rd drive lower comes neatly off a 127% expansion of the upward correction form 2. Traders can use the Fibonacci retracement tool to do this, just add 127% as an extra value Source: CMC Markets CMC Markets is an execution only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment security, transaction or investment strategy is suitable for any specific person.
One for the contrarians – Aussie Dollar
01:00, 28 May 2015