AUD/USD is back up to match its earlier high of 0.7384
The greenback is lower across the board – even against the likes of the yen and swissie now – as a fresh wave of offers hit in European trading. The dollar remains weak following the trade truce between US and China over the weekend and we’re seeing an extension of the earlier move in Asia now.
The pound and the euro also both hit session highs against the greenback with the former rising to 1.2823 while the latter is at 1.1380 pushing towards 1.1400. For AUD/USD, price is now aiming back towards a test of the 200-day MA (blue line) @ 0.7419. That will be a key line in the sand for sellers to retain any form of downside bias as we close out the year.
The only fundamental shift is the US-China trade truce but that is a big one for risk as it has been one the major issues all year in markets. Although it may not play out to be a lasting one at the end of the day, when aussie shorts are already so stretched, the squeeze is something to watch out for as in the past:
It’s not the first time I’ve mentioned this over the past month and it’s still the key thing at play here for the aussie.