For weeks, AUD/USD has been trapped in a range between 0.6280 and 0.6560. Today, Aussie is surging, reversing losses set overnight on the putrid Chinese trade data. Rallying global equities have lifted spirits, and along with them the Aussie.
If momentum can be maintained, barrier options at 0.6560 could prove a magnet. Chinese selling is expected in front of that level. Dealers report a buy signal from a Us money center bank is helping underpin the Oz this morning. We trade now at 0.6510.
UPDATE: Just hearing there are 0.6515 vanilla option expiries at 14:00 GMT (about 30 minutes). They may cap gains for the near-term.
The CAD is showing some strength today despite more rough Canadian housing data. A similar set up is seen in that pair which trades now at 1.2765.
