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Thomson Reuters
Oct 09 - 02:36 PM
AUD/USD - COMMENT-AUD/USD Bounce Fails To Achieve Escape Velocity
First appeared on eFXplus on Oct 09 - 12:50 PM

AUD/USD has extended its bounce off yesterday's 2-1/2-year low but not enough to erase lingering downside risks.
Today's rise was helped by upbeat risk sentiment on the back of gains in equities and commodities.
The fall of the U.S. 10-year Treasury yield from the seven-year high set earlier today has likely stoked most of the pair's gains as the greenback trades broadly lower.
Should the 10-year's slide extend, AUD/USD's corrective bounce might have further to run, though bearish risks will remain.
trade have not been resolved and President Trump repeated his threat to impose tariffs on $267 billion worth of additional Chinese imports if China retaliates for existing measures. Interest rate differentials are likely to remain as the Fed and RBA are on diverging rate paths.
yield spreads are likely to favor the greenback for some time to come. While daily techs suggest the bounce might extend, monthly techs favor bears as RSI is biased down with no divergence and AUD/USD is holding below September's low and the 76.4 percent Fib of the 0.6827-0.8136 rally.
Longer-term bears still have the February 2016 low targeted.

chart: Click here

Thomson Reuters IFR Markets


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