Commodity Dollars turned bullish last Friday and the bullish momentum got stronger yesterday after comments from the Chinese and US officials that the negotiations are producing positive results. That improved the sentiment in the financial markets yesterday and, as a result, safe havens crashed in the US session while risk currencies surged higher.
Commodity Dollars are really tied to the Chinese economy since China is the price export market for Australian and New Zealand materials. AUD/USD pushed higher to 0.7185 but it has been retracing lower since then, especially during the Asian session and on the European open.
That has brought AUD/USD down where a bunch of moving averages are standing and the stochastic indicator has become oversold on the H1 chart as you can see above. The retrace seems complete now and the moving averages are providing support since the price bounced off of them in the last hour, so we decided to use this opportunity to go long on this pair.
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