EUR/USD, AUD/USD: Near-Term Technical Correction An Opportunity - Nordea

How safe is the EUR haven? Looking at the correlations with equities, the EUR has been becoming less safe relative to USD, especially when stocks drop, and that’s due to the fact that positioning has to a large extent been normalized. And the USD side matters, too: global disinflation is fading, as per latest import price data, and China should surprise us more in the coming months. Inflation is good news, we were told.

So “risk on” should go on, and a possible short term correction, which some technicals signal, should be seen as opportunity.

The sharp AUDUSD sharp rally above the key levels was a trend breaker, and the respite I hoped for was very shallow and temporary so far.

I guess we will still see a correction short term to the trendline, maybe even retest 200D MA. Take profit on the AUDNZD long too now.

But overall picture is bullish, suggesting more broad USD weakness going forward.

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