Renewed weakness in the USD around month end is providing an opportunity for some base metals to rebound. It is not just the metals, other currencies such as sterling and the AUD are also showing near term signs of strength. For cable, the bullish volume indications noted in Daily FX Technical Volume Strategy – Cable positive volume are being vindicated and we expect short-term strength. Similarly for AUD/USD, stops likely located above 0.9700 are vulnerable. However, we view such moves as temporary given the larger bullish signals noted for the USD in recent reports (Bullish Reversal months forming in several currency pairs such as USD/MXN and USD/ILS).
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Barclays