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Aussie Dollar May Fall to Lowest Since June: Technical Analysis

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Aug. 31 (Bloomberg) -- The Australian dollar may drop over the next month to the lowest level since June after it breached a key support level, Gaitame.com Research Institute Ltd. said, citing trading patterns.

The so-called Aussie yesterday fell below its 200-day moving average of $1.0315 and is poised for further losses, according to Takuya Kawabata, a researcher at Gaitame.com, a unit of Japan’s largest currency-margin company. The currency will probably slide further if it drops below $1.0219, the 38.2 percent retracement on a Fibonacci chart of its climb from 95.82 U.S. cents on June 1 to $1.0613 on Aug. 9, Kawabata said. He said it may fall as low as $1.0098, the 50 percent retracement and a level unseen since June 29.

The Australian dollar “can probably extend losses toward the next level of retracement” if it breaks below $1.0219, Kawabata said. “It shouldn’t take too long for the Aussie to test $1.009, probably within a month.”

The Aussie dollar fetched $1.0291 as of 11 a.m. in Sydney from $1.0289 yesterday, when it touched $1.0277, the lowest since July 25. The currency is poised for a 1.1 percent drop this week and a 2 percent decline this month.

In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages from previous highs or lows.

To contact the reporter on this story: Mariko Ishikawa in Tokyo at mishikawa9@bloomberg.net;

To contact the editor responsible for this story: Garfield Reynolds at greynolds1@bloomberg.net