The correlation between the AUD/USD and S&P 500 stock index is showing signs of cracking and warns of a top forming for the Australian dollar. The latter's inability to break above 0.6900 when Wall Street shrugged off rising coronavirus infections to close more than 1.0% higher on Thursday is frustrating stale AUD/USD longs nL1N2E22AB.
If the recovery in risk assets proves to be a one-day detour before global economic growth concerns related to the surge in COVID-19 infections re-emerge, the AUD/USD will be vulnerable.
Key support is at the June 15 low at 0.6777 and a break below would suggest a top is in place at 0.6975-80, and a move towards the 200-day moving average at 0.6667 is underway.
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