20 Aug 2015
AUD/USD spikes towards Wed's high, bulls in ST control
FXStreet (Bali) - AUD/USD has spiked higher in early Tokyo, printing session highs of 0.7373 so far, with the move being driven by broad-based USD weakness in response to a more dovish-than-expected FOMC minutes.
FOMC minutes fails to pass test
The Sept rate decision is only 4 weeks away, and with the market having recently upped the odds for a potential rate hike, the fact that Wednesday's FOMC minutes provided no fresh hints, with the wide-ranging views on employment and inflation expanding, led to a notorious liquidation of USD long positions after expectations failed to be met. On the lead-up to the event, judging by the counter-intuitive bullish reaction by the USD, the market had been positioning for a hawkish outcome that never materialized.
AUD/USD technicals
We have seen a fresh wave of buyers reclaiming an intraday point of control circa 0.7340, with the break through in response to the FOMC minutes having been defended successfully, with buyers now aiming at 0.7378 Wed's high ahead of macro offers as we approach 0.74. Watch for any PBOC fix-led volatility at 1.15GMT. On a slightly bigger picture (daily timeframe), the real test for the AUD/USD will come on the ability to hold potential gains through 0.74-7450, an area of resistance which has been consistently protected by the smart money community ever since first broken in early July. Even if a bullish resolution is seen, 76 will prove even a tougher zone for the bulls. On the downside, 0.73 represents key support now.
FOMC minutes fails to pass test
The Sept rate decision is only 4 weeks away, and with the market having recently upped the odds for a potential rate hike, the fact that Wednesday's FOMC minutes provided no fresh hints, with the wide-ranging views on employment and inflation expanding, led to a notorious liquidation of USD long positions after expectations failed to be met. On the lead-up to the event, judging by the counter-intuitive bullish reaction by the USD, the market had been positioning for a hawkish outcome that never materialized.
AUD/USD technicals
We have seen a fresh wave of buyers reclaiming an intraday point of control circa 0.7340, with the break through in response to the FOMC minutes having been defended successfully, with buyers now aiming at 0.7378 Wed's high ahead of macro offers as we approach 0.74. Watch for any PBOC fix-led volatility at 1.15GMT. On a slightly bigger picture (daily timeframe), the real test for the AUD/USD will come on the ability to hold potential gains through 0.74-7450, an area of resistance which has been consistently protected by the smart money community ever since first broken in early July. Even if a bullish resolution is seen, 76 will prove even a tougher zone for the bulls. On the downside, 0.73 represents key support now.