No matter what happens on the data front, the AUD still wants to keep clawing its way higher.
In recent weeks, we’ve had a less than impressive CPI number, a muted RBA statement on monetary policy, no change in interest rates, some jawboning by the RBA and finally a strong beat on the US employment number. All of those elements are bearish for the AUD/USD – yet, it keeps on getting bid up over the course of the week.
In early trade on Monday, it appears to be the same old story, with the Aussie fighting its way back.
The NFP release on Friday hit the Aussie hard and the currency dropped all the way back under 0.7900.
Buying Interest
As we know, the RBA doesn’t want a strong currency and certainly not one above 80 cents.
But when there’s a considerable amount of bearish news in a market and it keeps on moving higher – or at the very least not falling away – that tells me as a trader that there’s significant size trying to buy this market.
How long will that buying last? It’s impossible to say.
What does appear to be happening is that the Aussie is getting bought up on Monday and there’s a decent trend line developing on the 30-minute chart. For now, I’d be looking to buy on pullbacks, while this retrace is going on.
When US markets open, we’ll get a better idea of what direction traders have in mind for the USD and whether the strong NFP number will be the catalysts US equity markets and Janet Yellen are looking for.
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