AUDUSD tried above 1.0400 yesterday and overnight, but too many event risks in the pipeline mean that we may not get a directional commitment from the pair until after the US election.
AUDUSD moved above the 1.0400 level and even took out the 1.0413 high from mid-October overnight, but a weak Australian PPI data point and weak metals prices saw the break unable to hold, though the likelier reason is that the market doesn’t want to make significant directional commitments until after the US employment data today at minimum, but even more so until after next Tuesday’s US presidential election.
Chart: AUDUSD
So the 1.0400/1.0425 area is the redrawn zone of resistance higher after the overnight reversal, while to the downside, the first real sign of a change in sentiment is a move back below the 200-day moving average and then the ascending line of consolidation – and those two levels are fast converging. Lower still is the key support that must be broken for bears to make more dramatic arguments for further downside, and that is the 1.0150 range support.
John J Hardy,
SAXO BANK