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AUD/USD: Setbacks keep finding buyers

FXStreet (Bali) - The Aussie has retained a bid tone in early Asia, with price finding brave buyers just below 0.87 - ACBs bids noted recently - before a recovery towards 0.8770, current price, and also representing the intersection of the 20-day EMA.

If on Wednesday it was sharp declines in US stocks and 10-year Treasury yields that led to a major USD long liquidation - latest COT report showed USD longs at record highs -, on Thursday, Fed's Bullard (considered hawkish) assisted the USD bears again, noting that “inflation expectations are declining in the U.S,” adding “that’s an important consideration for a central bank, and for that reason I think that a logical policy response at this juncture may be to delay the end of the QE.”

In the last Asian AUD/USD tech view - Close above 20DMA hints dip buying activity -, a bullish bias short term was thought to be in the cards, and despite the 20-day EMA was lost again in the last NY close, the dip buying activity seen will likely encourage attempts for higher levels, although never losing sight of the fact that we are in an overall bear market, so any rise should be taken as corrective in nature. The key areas to monitor today, will be a regain of the 20-day EMA, ahead of 0.88/0.8830, although only a break through 0.89 will confirm a double bottom is in place. On the downside, unlikely to see new lows until AUD's risk events next week, which will include RBA minutes, Aus CPI.


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