The USD Holds the Key to the AUD Fate
The AUD has been extremely quiet during Monday and Tuesday’s Asian session. While there is normally larger movements, this week features
The AUD has been extremely quiet during Monday and Tuesday’s Asian session. While there is normally larger movements, this week features a pretty thin economic calendar and of course Jackson Hole.
Central Bankers from across the globe will be meeting to discuss what might happen in the coming year regarding monetary policy. As a result markets can go a little quiet.
AUD Trending
During the overnight (US Session) hours, the AUD has been grinding higher. It’s been on a bit of an uptrend since breaking out of the bullish channel.
However the key point is that this is all on USD weakness. Often times when we have a big event coming up, markets get distracted by what might happen. There are reports around the Fed Chairman Janet Yellen is going to be a disappointment to markets, who are waiting with baited breath for a sense of direction.
While that plays out the USD seems to want to fall. Yesterday I wrote that I expected the AUD to hit 80 cents, this week, even though fundamentally I believe we are headed to sub-75 cents. All we can do is trade what the market is giving us and as the saying goes markets can stay irrational longer than we can stay liquid.
I’m still going to be playing this uptrend with a target of 80 cents – however I suspect most of the action in the US session. When Jackson Hole gets under way, all bets off and I will be moving to a news based trading strategy.
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