AUD/USD and AUD/JPY have been major disappointments to reflation traders today and both head into the close on an offered note. It could just be a case of too far too fast and prices need a period of consolidation.
The USD/JPY leg of the cross ran into heavy selling at the 90.50 area just ahead of the 16:00 GMT fix this morning and has been stuck in its tracks ever since. The Japanese authorities appear to have taken the downside out of play near-term but we may see a week or two of overhead supply to contend with as year-end flows are digested, until USD/JPY can move meaningfully higher.
AUD/USD is just the most loved currency on the planet and as such, has to shake out the longs ever so often to lighten its burden. A move below the 0.9030 area is probably needed to rattle the longs’ cage very much…
AUD/USD trades now at 0.9095 after reaching 0.9133 just after the open on Wall Street this morning.
