AUDUSD: more collapse for Australian Dollar?

2020年3月20日

In today's foreign exchange markets, the WXY wave pattern comprised of mostly 3 wave structures is more common than the typical 5 wave up, 3 wave down structure for stock markets. This is because foreign exchange don't have an inherent trend of 'always going up' in the long term. In fact, you could say some currencies are possibly doomed to fail in the long term against the US dollar, due to political, demographic and economic reasons. Belarusian ruble is one example that looks like it's always going down against US dollar.

Unfortunately, it looks like AUD is joining the club of 'long term losers against US dollar' too. The Reserve Bank of Australia is determined to keep interest rate close to or lower than zero, and I doubt they will follow when the United States eventually increase interest rate. It's quite feasible that RBA will drop the interest rate into deep negative territory like -1% when the next big global crash wreak havoc in Australian housing and equity market in the mid-2020s, putting more downside pressure on AUD. The Y wave of AUDUSD will at least drop to the low of 2001, and possibly lower than 0.48 within 5 years. Short term price recovery is likely though, may go above 0.6 in a couple of weeks.