AUD/USD breaks the downwards trendline resistance for the yr
If you are going to pull off a squeeze, do it proper. And that is what AUD/USD patrons have performed yesterday. The transfer increased not solely took out resistance ranges at zero.7150 and zero.7200, however extra importantly it broke the trendline resistance for the yr.
Value now seems in direction of a check of the 100-day MA (crimson line) @ zero.7272 after which comes the September excessive of zero.7315. Maintain a break above these ranges and the squeeze increased will lengthen to the subsequent leg in direction of zero.7400 aiming the July highs.
I’ll reiterate once more that essentially nothing has modified between the aussie and the greenback. Issues are nonetheless the identical because it was a month in the past. The one distinction now we have right here is the shift in temper (extra risk-on) but in addition the change in sentiment/consideration. Focus has now shifted in direction of positioning as promoting reaches exhaustive ranges – failing to interrupt zero.7000 – and it solely takes a small leak to interrupt the dam.
And the extreme brief positioning within the aussie has began to rear its ugly head in that regard. In instances like this, we will argue all we wish about fundamentals however when when the charts and the flows do not help it then there is no such thing as a case available.
There isn’t any doubt that the aussie will proceed to battle within the months forward however now just isn’t the time for that. When the chart is one thing like what we see above, why combat it?