Trade of the Day: AUD/USD (FIST Analysis)
Hello traders
After a strong start this morning, the Australian dollar faced significant selling pressure in the US session as risk-off flows hit the market.
The S&P 500 is falling, and US dollar is picking up - most likely because of flight to safety ahead of the meeting between PM Johnson and EC President Von der Leyen (scheduled at 19:00 GMT this evening).
As a sidenote, Australian consumer confidence picked up this morning, lifting the AUD in the overnight session, and tomorrow early morning Australian time we get new inflation expectations numbers from Australia.
INTERMARKET
This chart shows the AUD/USD 1-hour chart and the price of copper futures, 2-year yield differentials between AU and US, and the Invesco DB Base Metals fund (tracking commodities like copper, aluminium, and zinc). There is some strong bullish bias in the commodities, and the yield differentials are also picking up, which could support the Australian dollar in the short-term.
SENTIMENT
Hedge funds remain long in the AUD and increased their short bets on the USD.
TECHNICALS
The pair reached - and was breaking below - the 61.8% Fib level of the recent up-move where buying pressure could push the price up again. This was my initial trade entry.
The current selling is rather on low volume. If the price keeps falling, institutional traders will likely join the market with longs.
After a strong start this morning, the Australian dollar faced significant selling pressure in the US session as risk-off flows hit the market.
The S&P 500 is falling, and US dollar is picking up - most likely because of flight to safety ahead of the meeting between PM Johnson and EC President Von der Leyen (scheduled at 19:00 GMT this evening).
As a sidenote, Australian consumer confidence picked up this morning, lifting the AUD in the overnight session, and tomorrow early morning Australian time we get new inflation expectations numbers from Australia.
INTERMARKET
This chart shows the AUD/USD 1-hour chart and the price of copper futures, 2-year yield differentials between AU and US, and the Invesco DB Base Metals fund (tracking commodities like copper, aluminium, and zinc). There is some strong bullish bias in the commodities, and the yield differentials are also picking up, which could support the Australian dollar in the short-term.
SENTIMENT
Hedge funds remain long in the AUD and increased their short bets on the USD.
TECHNICALS
The pair reached - and was breaking below - the 61.8% Fib level of the recent up-move where buying pressure could push the price up again. This was my initial trade entry.
The current selling is rather on low volume. If the price keeps falling, institutional traders will likely join the market with longs.
Trade closed: target reached:
Profitable trade in AUD/JPY, retraced exactly at the level we followed
