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AUDUSD keeps on going and going

Market Analysis

AUDUSD, Daily              

The Aussie and Kiwi dollars are outperforming so far today, showing respective gains of 0.6% and 0.8% against the USD. (See our Traders Board for details) Fitch’s AA rating for long-term New Zealand sovereign debt helped the Kiwi dollar higher, while gains in commodity prices have also been supportive for both the antipodean currencies. Expectations for a 25 bp rate cut by the RBNZ at its review tomorrow have been fully baked in. Yield differentials are also strongly in their favour relative to core developed-world benchmarks, which, in the case of Australia was given sharpened relevance by last week’s RBA Statement on Monday Policy which noted that CPI was expected to pick up “gradually to around 2% by the end of the forecast period,” signalling that the central bank may be done with easing following quarter-point cuts last week and in May.

Current intraday percentage change of currencies against other major currencies since the last daily close at 23:59:59 server time.

2016-08-10_15-34-282016-08-10_15-31-59

Technically, the AUDUSD remains in a strong up trend since it broke and held the 20 DMA (August 2), which offers a support area 0.7620-0.7590. The near two week rise from the 23.6 Fibonacci level and psychological 0.7450 level could lead to a re trace to 0.7690 before Target 1 at 0.7840 and Target 2 at 0.8000.

 

 

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Stuart Cowell

Market Analyst

HotForex

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