Aus Dollar Forecasts 2014 to 2015: Exchange Rate vs GBP, US Dollar and Euro Predictions by TD Securities

The forecasts encompass the nearer-term through to the latter stages of 2014 and early 2015.

The stand-out take-away at the current time concerns the building up of downside momentum against the US dollar which could, conceivably, extend weakness through the wider complex.

Firstly, here are the mid-market rates for reference at the start of the new week:

• The pound to Australian dollar exchange rate (GBP/AUD) is 0.29 pct lower at 1.8098. Note the RBA rate decision on Tuesday AM offered little surprises for the currency.
• The euro to Australian dollar exchange rate (EUR/AUD) is 0.19 pct lower at 1.4350.
• The Australian dollar rate to US dollar rate (AUD/USD) is 0.16 pct higher at 0.9320.

Please be aware that all mid-market rates are subject to discretionary charges issued by your bank. An independent FX provider can, in many instances, deliver up to 5% more currency owing to their positioning in the markets. Please learn more here.

Aus to US dollar exchange rate: "Technical progress downside"

Shaun Osborne, Chief FX Strategist and Martin Schwerdtfeger, FX Strategist at TD Securities have noted the picture is turning bearish for the Aussie on the charts.

"Technical progress downside should continue towards the next support zone around 0.92 (Q2 lows at 0.9205 and 38.2% Fibonacci retracement derived from the 0.8660/0.95 rally at 0.9182) in the week ahead. Trend momentum is picking up on the short-term charts—which should ensure ongoing resistance to AUD rebounds on the low 0.093s," says Osborne.

TD Seucrities, who we note are finalists in The Technical Analyst Awards 2014, tell clients they are looking to sell rallies on AUD/USD.

Furthermore, it is noted that a close-up look at the weekly candle patterns reveals a couple of interesting things from a technical perspective.

"Firstly, the big weekly key reversal signal from late June —the basic reason for our negative view of the AUD’s technical prognosis— remains intact," says Osborne.

In broad terms, TD Securities have to expect a sizeable correction (at least) of this year’s AUD rally from the upper 0.86 area as a result.

"Secondly, despite the late week rebound in spot, the AUD is still heading for its lowest weekly close since late May," says Osborne.

Interestingly, it is pointed out that the AUD typically fares quite poorly in August from a seasonal perspective.

"Everything we see at the moment points to a repeat this year," says Osborne.

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Pound sterling vs Australian dollar: GBP/AUD at threat of breaking lower?

It would appear that sterling is not enjoying the same kind of bullish pressures against the Aussie as is the USD.

Indeed recent price action sees the GBPAUD looking to pressure support points on the weekly charts.

TD Securities note that downside pressures are building:

"The heavy intraday sell-off in the GBP today (forming a bearish out side range) leaves the short term chart looking weak and support under threat.

"We still tend to think that the GBP may avoid a further, marked drop but it would—still—be hard to ignore the technical implications of a clear and sustained break below 1.80."

Euro to Aus dollar forecast: Relief for the EUR

The euro to Aus dollar has been caught in a firm and sustained downtrend for much of 2014.

However, there are now reasons to question a continuation of the move in the immediate term as the euro exchange rate complex finds relief.

Nevertheless, Osborne reckons the broader risks here remain geared to the downside:

"The overall trend down remains deeply entrenched on the longer-term charts and the break below the June/July consolidation (bear flag formation) points to more losses going forward. From here, we have to look for the base of that bear flag formation to cap EUR gains in the upper 1.44s; otherwise we will have to go back to the drawing board and revise the bearish outlook."