AUDUSD trades to highest level of the week
The pair largely ignored the global stock market fall.With the carnage in the global stock markets this week:
- Nikkei down -5.34%
- Hang Seng -2.9%
- Shanghai -7.60%
- SPX/ASX 200, -4.69%
- German Dax -4.36%
- UK FTSE, -3.81%
- Nasdaq, -4%
- S&P, -4.10%
The typical risk-off selling of the AUDUSD (and NZDUSD) never materialized. Last Friday the AUDUSD closed at 0.70486. We made a new week high in the current hourly bar at 0.71394. That was the highest level since October 3rd.
Correlations don't always do the things you expect them to do and admittedly, the price did go lower, before moving higher during yesterday's trade (double bottom at 0.7040 area). However, the gains yesterday were impressive. I guess gold helped, but I was impressed.
Technically, the pair was helped with the double bottom from Monday and early Thursday. The price also moved above the 100 hour MA. IN the NY session yesterday, the pair swung above and below the 200 hour MA (green line) as the market seemed to digest the move higher.
Today, the price action has been more up and down with a tilt toward the upside. The pair targets the 38.2% at 0.7145. Above that and a trend line at 0.7167 and the 50% retracement at 0.7177 are potential targets.
On the downside, fail and move below the close at 0.7122 and then the low for the day at 0.7111, will look toward the converging 100 and 200 hour MAs (blue and green lines) at 0.7094-0.7100..
Having said that the big stock rebound today is not leading to much of a risk-on run. It's not going down which is good, but there is not a huge momentum run either.