Currency Updates:
The market finally settled after a wild ride yesterday morning and the AUD bear-tone which emerged immediately after the Fed has persisted through the day. I’m not really sure what the justification is but the market has this sentiment fairly deeply ingrained and doesn’t want to let go. The economic calendar is fairly light during Asian trade and it will again be flows and positional adjustment which gets the FX market moving.
TECHNICALS: I’m looking at a possible basing formation (see chart) in AUD/USD and even though we didn’t get the expected acceleration when .9250 broke, I still prefer the long side at current levels at least from a risk-reward perspective. Resistance is clear at .9350 and we may get some extended range trading between there and .9100 before the next directional move begins.
CROSSES: AUD/JPY has lost more ground overnight and this pair could be in for a very big fall if support levels at 89.25/50 break. Risk sentiment is uncertain and this is what might be weighing on the Aussie overall. EUR/AUD is again nearing important resistance at 1.4400 and the AUD/NZD is trading sideways around 1.1700.
ORDERS & FLOWS: Decent sized bids now at .9100/20 should be strong enough to hold today, unless of course AUD/JPY goes ballistic! Macro funds are still reportedly booking profits in EUR/AUD, selling rallies towards 1.4300/50, and this should give the AUD some support.
INTRADAY CONCLUSION: Overall I think the USD has topped out and will fall some more but the AUD remains very weak amongst the other majors and is again nearing really important levels against the USD, JPY and EUR. Buy intraday AUD/USD dips towards .9130 with stops below .9075.
TRADE OF THE DAY: I’m still on the short-term bearish USD/JPY play and Fridays are often when we see the big moves? Sell rallies towards 99.50 with stops above 100.
