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AUDUSD appears to be losing steam after reaching a 4-month high of 0.7223 on Monday, sparking speculation that the bulls may take a backseat in the short term. However. the bullish crossover between the 20- and the 50-period SMAs sustains optimism that any pullbacks could represent healthy consolidations rather than a disruption in the multi-week uptrend.
Market Update: USDCAD vs AUDUSD
What it would take to test/break parity (1.000), which is clearly an obstacle?
Simple algebra:
AUDCAD = USDCAD x AUDUSD
1. USDCAD break, then accelerates above 1.3910 while AUDUSD lags, stays below .7200 (e.g. 1.3950 x .71685)
2. AUDUSD break, accelerates above .7200 while USDCAD lags (e.g. 1.0000 = .7225 x 1.3841)
3. A little of both (e.g. 1.0000 = ..72 x 1.3889
Daily charts: (Right click on any image (or chart) to open a full screen in a new tab)
AUDUSD DAILY: 9-day pattern broken
Break of a 9-day pivot around .7000 yesterday (well documented here befrrehand) sent a bearish signal. The break of .6962, the bottom of the 9-day range exposes .6906 as the next target.
On the upside, back above .6962 would cool the risk but only .7000+ woul;d negate it.
EURUSD DAILY: 7 day pattern
Extended its trade around 1.14, which has now traded in each of the past 7 days.
Range over this period has been 1.1353-1.1435, low was set yesterday before a bounce to 1.14.
As can be seen by moves in USDCAD after breaking a 12-day pivot around 1.42 and yesterday’s break of a 9-day pattern around AUDUSD .7000, it pays to keep an eye on EURUSD’s pivot around 1,14, The only difference is that 1.42 and .70 are more important pivotal levels than 1.14.
Onus would seem to be on the bull side to break the pattern as chart shows consolidation but with a greater risk on the downside. Let’s see if the reaction to the FOMC resolves the battle.
Forex Market Snapshot
A bit of a disconnect with crude oil up, US bond yields up slightly and the USD trading mixed as markets show a reluctance to chase war headlines too far.
AUD, the underperformer, has seen AUDUSD extend its slide after breaking a 9-day pivot around .7000 (bearish signal) yesterday.
The JPY is outperforming, suggesting AUDJPY selling has been a dominant flow as expectations of an RBA rate hike were scaled back after the CPI report.
A key focus today will be on the FOMC decision and Chair Warsh’s press conference.
AUDUSD DAILY: Adios .7000?
On the verge of breaking a 9 day pivot pattern around .7000, which sends a bearish signal but only confirmed by a firm break of .6962, the bottom of the 9-day range.
Catalyst: MARKET ANALYSIS: AUD weaker after RBA’s Bullock fails to convince market of immediate tightening Newsquawk.com
Forex Market Snapshot
A bit oif a disconnect with softer oil prices (and dip in US yields) while the dollar maintains a generally firm tone but so far with limited follow through.
EUREUSD: Back to about unchanged after holding a test of 1.1361 suppoprt
USDJPY: Filled its opening week gap to 163.85
GBPUSD: Focus still on 1.3300 (bearish below) after breaking down through it yesterday (low 1.3284)
AUDUSD: The underperformer and so far breaking a 9-day pivot around .7000 (bearish) but only confirmed by a break of .6962 (tested, holding so far).
Forex Market Snapshot: USD down but not out
The dollar is trading lower (except vs the CAD) as opening week gaps remain unfilled. Moves have so far seen limited follow through in a reaction to what is still just a fragile pause in US-Iran hostilities.
This leaves markets in a headline watching mode with one eye on crude oil where Brent has fallen sharply from last week’s brief trade above $100 (last $89,13m -7.9%).
For USD traders, EURUSD 1.14 is pivotal after the move up paused below 1.1435.
AUDUSD is currently trading at .7000, a level that has traded in each of the past 9 days.
AUDUSD DAILY: 9 DAYS IN A ROW
Opening gap has seen .7000 trade for the 9th day in a row.
Range ovcer this period .6962-.7027
The longer this pattern goes on, the greater the risk of a directional move once it is broken. Otherwise, expect limited follow through until .7000 becomes clear support or resistance.
AUDUSD DAILY: Will the pattern around .70 be extended? Pattern: .7000 has traded in each of the past 7 days Range over this period: .6962-.7027 (low was set yeswterday) To extend the pattern to 8 days, .7000 would need to print today. If not, it would be a potential bearish sign BUT only confirmed if the .6962 low is taken out.
Forex Market Snapshot: Calm before the next storm?
While Middle East hostilities expand, oil continues to rise and US yields follow, the dollar has stayed on the sidelines, trading another lackluster session overnight.>
USDJPY has cautiously extended its 40-year high with fear of triggering a Bo J attack retraining the move.
EURUSD yet to shake a focus from 1.14 after running stops on the upside overnight, which has raised questions whether it is trading bid in n offered market or vice versa.
AUDUSD has extended its pivot around ..7000 for the7th day in a row. Range over this time has been .6965-.7027
Underperformers: NZD, JPY
Forex Market Snapshot
Firmer crude oil => firmer yields => firmer USD
USDJPY at a new 40-year high. BoJ threat looms but any intervention would find willing buyers below the market. 163.50 is targeted next, if broken then 165 comes on the radar
GBPUSD weaker on firmer EURGBP but upside paused below .8545 resistance, cooling the move.
EURUSD down but clinging to 1.1400 as support
USDCAD extending rebound from 1.40 as fresh tariff threat “Trump’s” firmer crude oil
AUDUSD back toward .7000 after failing to hold above .7020
XAUUSD and BTCUSD getting safe haven flows?
Forex Market Snapshot
The dollar is trading close to unchanged exdcewpt vs a firm,er AUDUSD and NZDUSD) on China stimulus hopes and after an opening week gap up in crude opil faling to follow through and has since retreated. This comes despite increased US-Iran attacks and concerns that they could escalate further.
So in a 1 + 1 doesn’t equial 2 start to the week markets are taking their cues from the oil market.
Forex Market Snapshot
The dollar is trading softer but so far with limited follow through in holiday thinned end to the week trading.
AUDUSD is an outperformer, helped by metals extending post-NFP gains.
EURUSD is pivoting 1.1450 as it trades within a 1.1420-73 range, limit on the downside while above 1.1400-20
AUDUSD DAILY:: The biggest loser (currently -1,22%)
Breaking down below 6978 and whether there is a run at potential targets at 6875 and 6833 dependent on the risk on/off mood.
Treat any bounce as a retracement unless the trendline is broken. To fully negate the downside risk, 7088 would need to be broken.
