AUD/USD: The Most Bullish It’s Been In February

If you revisit yesterday’s dashboard, you’d notice the short-term flows were in complete alignment for the Aussie to be a buy on weakness market. Fast forward to today’s price action, and we are still presented with an even improved picture as technicals and intermarket flows stay in agreement. The dashboard above is an absolute sea of green, and while anything can happen intraday that may alter this view, the way I can only go about these analyses is to take the 5pm NY close as reference, and the chart is giving us all types of hints that the path of least resistance should be higher. The validation of the new leg higher in prices allows us to draw an ascending trendline, which should serve us well as a visual representation of the constructive outlook for this market. Judging by the close in highly correlated instruments such as the Yuan or equities, don’t be surprised if strategies look to exploit this market via shallow pullbacks. A retest of the 25-HMA as guide would be an ideal starting point, with other discretionary elements based on one’s own preferences to be applied before entry.