AUD/USD's Huge Daily Reversal to Fresh 2016 Highs
has followed suit of the recovery in oil and has closed and exceeded
the bearish opening gap. Moreover, the price has rallied to fresh highs
for 2016, scoring 07760 and up +0.40% on the session and from lows of
AUD/USD has followed the price of oil and performances in China and subsequent effects on the price of oil as China accounts for a large share of the global demand for oil and what goes down in China impacts the Aussie as being Australia's largest trade partner.
However, the scenario of the upside, as suggested overnight in AUD/USD: stabilising after heavy supply, has played out. AUD/USD has rallied to the vicinity of the previous target of overnights R2 at 0.7768, making fresh highs for the year of 0.7761.
The catalyst for the move came in European trade as AUD/JPY buyers emerged and as Europe got going, the price of oil managed a strong recovery as the heat from the Doha story cooled down as markets got more realistic on the outlook for the price of oil. One opinion the market might be starting to take is that a production freeze where most countries are producing at near-record levels, is unlikely to be a major cap on supplies anyway.
Doha aftermath, oil ministers piping up still
Since the weekend's Doha talks and the Saudis u-turn, the Iranian oil minister argued that they are not responsible for the oil glut and have asked OPEC and non-OPEC oil producers to continue talks to bring market stability. Meanwhile, despite Russian energy minister Novak's recent comments about stability coming from supply and demand rather than as a subsequent outcome on such agreements as output freezes, Russia was reported to hold talks with Saudi Arabia on output freeze if OPEC decides to proceed internally.
AUD/USD holds a bullish bias still above the 20 dma at 0.7614 targeting 0.7801 R3. RSI (14) remains below overbought readings across the time scales at 62 on the daily candles. The pivot is located at 0.7713. Should a breakout to the downside occur, S3 is located at 0.7636 with today's low at 0.7630 with the aforementioned 20 dma as a key support.