Australian dollar strong again, where to buy it

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AUD/USD climbed 60 pips from the Asian low to the best levels since August 19. Last at 0.9321 but with some sellers at 0.9335 according to our orderboard.

The big story in the FX market in the past 6 weeks has been the US dollar rally but the Australian dollar has been almost as strong since July 10.

Performance vs US dollar since July 10

Performance vs US dollar since July 10

During that time the Australian dollar has had to shake off a few negative headlines but Stevens’ hint that rates won’t be cut further last week is key.

Traders are piling into US dollars and at some point a shakeout is inevitable. Maybe it’s better to get in the second-best currency on one of the crosses. AUD net positioning in the CFTC report is a net long but still well below the extremes of the past few years.

Australian dollar CFTC net

Australian dollar CFTC net

The spot I would look is AUD/JPY. After 4 months of consolidation the pair looks to be breaking out to the upside and poised to challenge the 61.8% retracement of the 2013 decline.

AUDJPY daily chart with 200-dma

AUDJPY daily chart with 200-dma

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.

4 Comments

  1. takes 2 for a market ;)

    started eur/aud longs between 1.416 and prolly ~1.38(pity I missed the 1st tempo by bein’ cheap and sitting at 1.419, but… such is life). While I don’t expect the thousands of pips from last year, 1.45 and 1.48 could be doable?

  2. I also like AUD/CHF longs here and pyramid up to hoy

  3. Sorry, but i see AUD around .895-0.9 by year end. good luck!

  4. like the sun sets up in the west, so 200 dma has to be tested;

    been a fine ride and I’m not interested in the slog. Good luck to those who stay long on eur/aud. ;)

    uh, and nice top picking at 97 :P

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