Originally published by AxiTrader
The Australian dollar is sitting at 0.7962 this morning but there is every chance it is also on borrowed time at this level given that copper, iron ore, base metals, and stocks associated with same have all come under a little pressure over the past 24 hours.
Of course, the US dollar's weakness was a great salve to the Aussie dollar last night bringing it back from the low of 0.7938 as the buck's strength faded the longer the days trading went on. That's left most US dollar forex pairs with inside days after the big moves previous.
Now the reason I'm suggesting the AUD/USD might be vulnerable is perhaps on borrowed time, and could be levitating, is for the same reason I've been saying it was well bid recently.
The commodity price moves and the moves in metals and mining shares reversed a little in the past 24 hours. If that continues then even with a weaker US dollar the Aussie may struggle to keep faith with gains in the euro and other pairs. Indeed just yesterday Barclays (LON:BARC) warned its clients of an imminent sell-off in iron ore (-1%+ overnight) back to $50 a tonne in Q2.
It’s not a guarantee the Aussie will reverse, and certainly not currently as the US dollar weakness continues. But it’s something to watch in the outlook.
Tomorrow's employment report will have something to say about the next 100points as well.
Looking at the price action then, the Aussie has stalled below yesterday's higher and has had a mildly bearish inside day. At least by my read.
The uptrend is still intact so I won't over egg it. But prices are starting to look a little stretched.
Have a great day's trading.