Originally published by AxiTrader
The Australian dollar is lower but doing quite well on the crosses this morning even though it is under a little pressure at 0.7908 against the US dollar.
That the Aussie has done relatively well both against the US dollar, and on the crosses, is confirmation that the usual drivers of its strength or weakness continue to be the key determinants of value.
That is, metals are strong - even after last night's reversal in iron ore and copper coming off the top. The Australian economy remains strong. The global economy remains strong. And investor risk appetite picked up last night with a solid rally in stocks and a little selling in safe haven assets like gold, the yen and Swiss franc.
Of the key primary drivers I look at only the US dollar, and the break of a 4-hourly trend line were negative for the AUD/USD. Indeed, the iShares MSCI Global Metals & Mining Producers (NYSE:PICK) to outperform the overall global MSCI share index, which further supports the Aussie dollar.
Of course with iron ore futures reversing in Shanghai last night, and copper dipping from its new recent high, we'll see how the Aussie fares in trade today.
As I highlighted over recent days. The battle at the moment is within the recent ranges and the outlook for the US dollar. How things play out is going to need economic data - both here in Australia and globally - and central bank guidance. Of course, a Trump/Republican tax plan actually getting up will be very bullish for the US dollar.
We'll see.
In the meantime, we have the charts to guide us.
Mediumish term the dailies show a 0.7800/0.8060 range might be in the process of being established.
Shorter term - looking at the 4-hour charts 0.7885/90 looks like important support now that the little uptrend from the 78 cent low last week has broken in the past day. 0.7925 is the high over the past 12 hours and above that 0.7940/50.
Here's the 4-hour chart.
Have a great day's trading.