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Thomson Reuters
Jan 31 - 02:36 PM
AUD/USD - COMMENT-AUD/USD's Risk Proxy Status Should Keep It Bid
First appeared on eFXplus on Jan 31 - 12:15 PM

AUD/USD hit a new high for January after piercing the 200-DMA and further gains are likely as risk-sensitive assets should remain buoyed.
The Fed's dovish stance has given traders confidence to put riskier bets in their portfolios.
Equity and commodity prices are extending Fed-induced gains while emerging market currencies, especially China's yuan, are putting in solid gains against the greenback.
The aussie dollar remains correlated high-beta assets and should also rally even though Australian-U.S.
yield spreads currently favor the greenback.
Should the U.S. dollar's yield advantage erode the case for further AUD/USD gains will grow.
Technicals favor bulls and suggest the possibility of significant AUD/USD gains.
Daily and monthly RSIs are biased up.
Monthly RSI is nowhere near overbought which should give bulls a big tailwind.
January's massive bull hammer candle suggests bulls have the upper hand.
A break and sustained hold above December's 0.7394 high could indicate a major bottom is in.
Should the bottom be put in bulls will target resistance in the 0.7485/00, 0.7675/85 and 0.7810/20 zones.

chart: Click here

Thomson Reuters IFR Markets


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