Well, all I can do is repeat what I mentioned in the update below about USD sentiment. I feel the same way about the AUD as I did when I wrote an earlier post in terms of my conviction and intuition, except this time I have the inclination to be a bear. As some of you may have gathered I am a natural contrarian. AUDUSD has hit a major extension level at .8700 and has formed a rising wedge, which on a weekly chart has been broken to the upside. This break has failed to gain momentum and has also failed to close above .8700 on a weekly basis. All I can say is watch this one and also NZDUSD. These commodity currencies have gone a long way in a short time. If the global economy does not come roaring back then these currencies are going to get trounced. Couple this with the fact that EURAUD is technically set up for a recovery (more on that later) and GBPAUD has hit a 20 year low, this is one currency that needs to take a breather. Look out to see if AUDUSD leaves a false break higher next week. If so, this could be an early indication that there will be swift losses ahead. In my opinion any further rises beyond the .8700 region will just make the eventual fall even more tasty then it is currently set up to be.
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