EvanJones
Short

AUDUSD: If China fails hard, then a hard sell is on!

FX:AUDUSD   Australian Dollar/U.S. Dollar
44 0 2
I've been investigating the potential affects of a collapse in China's banking system recently and this got me thinking about the affects to Commodity currencies such as the Aussie Dollar.

Currently, the US Dollar             is slowing down and has potential to drop heavily based on the interest scenario with the FED, which would imply that the AUDUSD             would not drop but in fact climb. However, if the potential slowdown and uncovering in China proves to be extended further (fulled by recent Stock/Indices sell offs) then I anticipate that the Aussie will fall heavily in value.

On the chart we have a potential H&S pattern in formation. This is often difficult to call but based on my analysis we could see the neckline break and a plunge to the 0.68 region. A way to play this is to have pending sells at the recent low of 0.69735 and if triggered would confirm the H&S pattern.

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