Allure of yield helps Australian dollar – orders

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The Australian dollar is showing some positive short and longer-term signals. It’s also underpinned by Australian 10-year yields at 3.78% — much higher than other major economies.

AUD/USD broke a minor downtrend today and that could be signaling the end of the consolidation that’s been ongoing since late April.

AUDUSD daily

AUD/USD daily

If you scale into the shorter term, a positive series of higher highs and higher lows is also building.

 

AUDUSD 10 minute chart

AUDUSD 10 minute chart

The orderboard shows strong offers at 0.9400 and sales at today’s high of 0.9384 are likely also building. Another round of strong offers sits at 0.9420 then 0.9450 with buy stops above.

There is talk of sell stops at 0.9415 with bids at 0.9300 and more stops at 0.9290.

Author: Adam Button

Adam Button is the managing editor of ForexLiveâ„¢. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes there's an edge in knowing every tidbit of news. He was formerly the head of the markets team at the Canadian Economic Press and is a graduate of Ryerson University. Adam lives in Montreal, follow him on Twitter: @FX_Button.

2014-06-10T19:06:47+0000

All|Americas|Australian Dollar|Regions

AUD/USD|Australian dollar

Adam Button

6 Comments

  1. Adam, the same story is in the kiwi as well.

  2. There may be more “bang for the buck” in going long AUD/JPY, at this point (i. e., the pair is – once again – toeing the April – present 50% retracement line in the sand).

  3. Very divergent in the short term though. I’m thinking it’s a fake out. I’ll short on a h1/h4 close below the ascending TL: https://www.tradingview.com/x/vFeA8X9n

  4. Agree with nate’s point about the divergencies. Also, the market is increasingly long AUD ( http://www.forexlive.com/blog/2014/06/06/cftc-commitments-of-traders-traders-caught-leaning-too-far-in-euro-shorts/ ) , so it might be time for at least a squeeze down.

  5. I’m talking a squeeze below .90!

  6. I wouldn’t be against it ;) But there was time to build a lot of support levels since we’ve been around 0.90, with 0.92 being that heavily defended barrier option level… By the way, do we know the option is still there, or expired? Adam, do you perhaps know something on that?

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