AUDUSD – Where to Now?

AUDUSD – Where to Now?

Amongst the majors, the Aussie was especially quiet last week. While euro, yen and cable put in 300-400 point ranges, AUDUSD hasn’t move more than 50 pips per day. Next week that lack of volatility may come to an end. On Monday the market will get a look at the latest Chinese Industrial Production data and if it shows improvement the bid in Aussie will remain firm under the assumption that RBA will remain neutral for foreseeable future.

But the real test will come on Wednesday as the market get a look at the FOMC rate decision and the AU employment data. US yields have been on a runaway move higher and that has been a key factor in depressing Aussie prices as carry trade flows pour out of the unit. But if the Fed casts a dovish stance, the Aussie could rebound with a vengeance as much of the air will come out of the US yield rally. That could only be further confirmed if AU labor data shows more growth.

For now the pair trapped in a 7350 -7550 range, but next week it will likely break out of its low volatility trap one way or another.

Chart Of The Day

Leave a Comment

Your email address will not be published. Required fields are marked *