Australian Dollar / US Dollar News And Analysis
- The Australian dollar exchange rate experienced a strong gain versus its US counterpart, as it closed up by almost one percent at $1.0469 and above the previous resistance level around $1.0450. The move on Friday had AUDUSD trading at 118% of the average daily range and 120 pips with most of this to the upside.
- Central bank liquidity measures are thought to be behind the Australian dollar to US dollar rally with Japan’s central bank announcing another round of monetary policy easing; the market moved towards high yielding assets as a “risk on” sentiment dominated; the S&P500, often seen as a barometer for risk, posted the best percentage gain on a weekly basis since March.
- COT report update – Large speculators are still net long the AUD at 46,041 net long futures contracts with little change from the previous weeks reading of 48,421. Please remember the COT data shows Tuesdays data.
- Price is now located just under the round number 1.0500 level after triggering a near double bottom as can be seen on the chart below. A move back to the 150 EMA which is currently located around Thursdays high may find previous resistance becoming support. Price action around 1.0500 is seen as key in the near to medium term as is the markets reaction to next weeks potential rate cut from the RBA (Reserve Bank of Australia).
Australian Dollar / US Dollar Chart