AUD/USD intermarket: watching copper's current intra-session negative correlation

AUD/USD has been a top performer this week and again overnight, despite the correlation with copper breaking down the most since early March of this year.

End of March business saw copper CFD's dropping like a stone on poor Chinese trade earlier in the month, despite seasonal bids and consumer activity. Copper was breaking through the 2.26 resistance from 2.28 and 2016 highs, but fell down to 2.08 by early April while at the same time, the Aussie remained relatively robust until it made territory on to the 0.77 handle and to levels not seen since June 2015. It was only when the Aussie kept going to the 0.78 handle in late April that Copper and the Aussie correlated fully in tandem again. 

Copper to play catch up on positive outcome in Chinese trade balance?

While the Aussie had started to make a bottom at 0.7220 and copper has remained in a narrow range between 2.08/10. However, China's outlook has hurt the outlook for copper this week, an economy that Yellen has made remarks upon and the price has deviated from the correlation as the Aussie marks up further scores on the upside vs a depressed US dollar and in light of a less dovish RBA from yesterday. Today's trade balance will be key from China and a good number should be both supportive to the Aussie and copper, with copper possibly with the most to gain bringing the correlation back into line.

AUD/USD tending outlook