Friday, September 3, 2010

AUD/USD. Consolidating Wednesday’s rally

AUD/USD (0.9100) is down modestly overnight, consolidating Wednesday’s rally. Something of a wedge formation forming as spot has traded higher lows since May but lower highs since April.

Technicals:

  • Trend: Daily higher; Weekly higher.

  • Overbought/Oversold (stochastics): Daily neutral; Weekly neutral.

  • Support/Resistance: Technical support lies at 0.8771 (Aug25 low), 0.8634 (Jul19 low), 0.8316 (Jul1 low), 0.8067 (May25 low) and 0.7704 (Jul’09 low). Resistance for AUD/USD exists at 0.9117 (Sep 1&2 high), 0.9222 (Aug6 high), 0.9389 (2010 high), 0.9406 (2009 high), and 0.9850 (2008 high).

Positioning:

  • The risk reversal (3m, 25delta) rose overnight despite the correction in spot. The reversal lies in the middle of the six-month range, providing little information as to future price action.

  • Implied Vol (3m) rose overnight, and it continues to consolidate in the lower 1/3 of its six-month range.

Cross-asset valuations: AUD/USD has correlated most strongly with equities (S&P500, positive), commodities (CRB, positive) and the DXY (negative.)


No comments:

Post a Comment