Originally published by AxiTrader
Is that it?
Surely that's the question Aussie dollar bulls will be asking themselves after a chronically sick US dollar and very solid employment data yesterday couldn't get AUD/USD above 0.7466.
Worse still once the US dollar recovered its poise on the back of the good prints for initial and continuing jobless claims and the bounce in the Philly Fed index the Aussie has been chased back to 0.7414 this morning.
Given the environment - yes stocks rallied but it wasn't much of a bounce - it's not unusual that the Australian dollar remains pressured and STILL underperforming on the crosses.
Indeed as I explained in my piece discussing why volatility in markets clusters the tendency of global investors and traders to trim their sails in times of heightened uncertainty and high stress means that they cut back on "non-core" or "non-benchmark" positions like the Australian dollar.
And it doesn't help that market funks usually come with a concern about the overall outlook for risk assets and often the economy.
Anyway it leaves the Aussie dollar struggling a little this morning after what looks like an awfully bearish candle for the previous day's trade.
It looks to me that a break of 0.7405 could be the catalyst for a deeper move. Naturally, the recent low at 0.7385/90 is the next level to watch and if that breaks its 0.7330. That's the recent triple low and the 50% Fibonacci level of the 2015-2016 upmove.
On the top side 0.74450 is again the level to watch and then 0.7466.
It's a quiet few days in markets now before the OPEC meeting and UK and US GDP in the back half of next wee. So positive catalysts might be lacking.
Have a great day's trading.