We have been patiently observing the counter-trend Aussie rally versus safe-haven currencies like the Japanese Yen in June. You can see below on the daily charts that resistance was found initially today at the 200 day moving average (now sloping downward). As I have been discussing, the Aussie has been a pretty good gauge of global risk appetite, or lack thereof. If the bears are going to reassert themselves after this rally, now is their chance after being patient for quite some time.
Alternatively, if the Aussie and risk assets have truly bottomed in June, then we should see either some healthy sideways action for a few days, or a higher low with bullish divergences galore.
Note the potential shooting star candlestick (bearish reversal omen with downside confirmation) on today’s Aussie/Yen cross.
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Thanks, another piece of the puzzle.
A favorite indicator here and one I watch in my risk grid with a 42 period SMA for market bias. Thanks for sharing your insight on it in your posts.
Nice.
If you zoom out a bit there is a pretty clear pivot at 82.45-50 area. Im watching that for direction. USDJPY is leading and if she can clear 79.78 we got a daily higher low and a trend change …
PPP suggests the AUD is 30% over valued; they have a housing bubble; and they have a codependent relationship with China’s bubble. However, you could have said the same thing last year. It might be a better trading vehicle than a way to express a macro view.