FOREX market is like a choppy sea where you easily suffer from dizzy spells. However, rough and volatile as the FOREX market may be, it treads along on a logical trend on the bases of the market fundamentals.
Three years back, I recommended a strong buy of AUD based on the declining greenback, the uptrend of the Australian rate of interest and the commodity-backed booming economy.
"Go in for a medium to long-term holding of AUD," I told some of my friends who were keen on the currency.
AUD then was really a two-edged sword, with prospective capital appreciation and interest earnings.
If you had taken up AUD way back in 2005, you would have laughed all the way to bank with handsome gains now.
But AUD is losing its glitter with good prospect of a downside. The pressure primarily comes from the strengthening dollar and the weakening Australian economy. Now, with the RBA on the likelihood to go for rate cuts, AUD has lost some shine.
The sentiment for AUD is definitely bearish!