AUD/USD Reaching for the Sky, but is the Sky the Limit?
The antipodeans are the best performers yet again although have now met supply in the U.S. session.
AUD/USD was propelled higher on the back of the RBA minutes overnight setting a scene where the RBA are on hold for the near term given the minutes described policy as 'very' accommodative.
Stevens has also been speaking in NY at the Global Markets Macro Conference.
The main takeaways were that he said there are no signs of financial shocks that would weigh further on global growth and only a failure to lift economic growth is the biggest threat to the global financial system.
What was surprising is he said that Central Banks should target growth and not exchange rates, as if that is going to give him an advantage in the global FX wars that have been under way for some time already. In respect of monetary policy, he explained that they have not yet felt the effects of monetary stimulus, which again signals that the RBA are on hold for some time to come, further underpinning the Aussie.
We have now conquered the 0.78 handle and have targets set on R2 at 0.7844 converging with a strong fibo resistance at 0.7849. A break of that would be significant given it is the area of resistance that has held since June 2015 within the strong downtrend of 2014. A break there opens up the classic R3 at 0.7927 and the 100 week sma at 0.7934. To the downside, S3 is at 0.7691 and S3 is located at 0.7652.