Currency Updates:
The Thanksgiving holiday has ensured a fairly quiet overnight session with the AUD/USD trading in a quiet range. End-of-month flows will be the main factor in today’s trading session and all reports that I’ve read expect these flows to be AUD/USD positive. Nevertheless, the big real-money funds have been very regular sellers of AUD against all of the other majors and we must wait and see whether this continues or not.
Technical support level at .9060, which is the 76.4% retracement of the rally from .8845, held on the first test. The short-term charts are showing a possible reversal pattern (see chart) which the retail market in particular tends to trade off. Hourly closes back above .9135/40 should lead to an increase in bullish momentum. Similarly, a break below .9050 will increase bearish momentum.
The AUD has stabilised on the crosses over the last 24 hours. AUD/JPY has made modest gains but is still stuck in range-trading mode either side of 93.00. GBP/AUD has settled down after recent spikes but is holding on to most of its gains, usually a bullish sign. AUD/NZD is back at its breakdown level and recent pivot near 1.1200 and if the bulls can regain this level, we could get a sharp short-covering spike?
Reasonably quiet over the last 24 hours and there are no big orders being reported in the market, so we must wait and see if/when the flows emerge.
I’m tending towards being bullish on the day for AUD/USD. The big real-money players in the US will be out of the market for a long Thanksgiving weekend and they’ve been heavy sellers of AUD in recent weeks. If the end-of-month demand appears then we should see a move higher today.
Exactly same as yesterday, I’d continue to play EUR/USD and GBP/USD from the long side, and if you want a bit of extra volatility then look to buy EUR/JPY or GBP/JPY. Also, as above, buy AUD/USD with stops below .9050 looking for .9250. Finally, the really brave can consider going long GBP/NZD on a bullish break.
