ridethepig | AUD Market Commentary 2020.05.12
A normal move, but one which has a deeper meaning after the Chinese ban on Australian beef. Here tracking closely 0.650x resistance to mark another important high here. It is a clearly loud signal on the foreign policy side of their relationship considerably weakening, the Giant Panda (PBOC) who was once always on the AUD bid has taken cover.
While Australia may be better positioned than many in terms of case numbers, it is in no way advisable to emphasise this too much. We are still tracking the same forecasts set out last month:
"Inline Case - US and Europe opening in July with clear preparations for further rounds of social distancing programs that will come into play again at year-end through Q1 2021 as the virus migrates back in the Winter months. Opens up another calculated leg down in risk markets to sweep the current floor in place and early buyers
It looks like we are set for a re-opening this summer and for schools in the West to go back in September. We will keep a close eye together on whether the inflows dry up, and will it be for long? We'll see. For now keeping a defensive stance, when equities roll over we will have a clearly defined swing and range in play for the rest of 2020."
Remember any hell-bent strategy on buying AUD, without taking into consideration the risks around the fallout of the West with China and their own domestic relationship will end badly. Protectionism, like a garden of weeds, will continue to force globalisation into retreat and wreak havoc!
On the technical side, 0.650x is strong resistance and with US Equities S&P sitting under the 3,000 level we have all the 'green lights' for a second selloff in risk markets. I am actively adding AUDUSD shorts at 0.650x with stops above the double top at 0.660x.
While Australia may be better positioned than many in terms of case numbers, it is in no way advisable to emphasise this too much. We are still tracking the same forecasts set out last month:
"Inline Case - US and Europe opening in July with clear preparations for further rounds of social distancing programs that will come into play again at year-end through Q1 2021 as the virus migrates back in the Winter months. Opens up another calculated leg down in risk markets to sweep the current floor in place and early buyers
It looks like we are set for a re-opening this summer and for schools in the West to go back in September. We will keep a close eye together on whether the inflows dry up, and will it be for long? We'll see. For now keeping a defensive stance, when equities roll over we will have a clearly defined swing and range in play for the rest of 2020."
Remember any hell-bent strategy on buying AUD, without taking into consideration the risks around the fallout of the West with China and their own domestic relationship will end badly. Protectionism, like a garden of weeds, will continue to force globalisation into retreat and wreak havoc!
On the technical side, 0.650x is strong resistance and with US Equities S&P sitting under the 3,000 level we have all the 'green lights' for a second selloff in risk markets. I am actively adding AUDUSD shorts at 0.650x with stops above the double top at 0.660x.