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.
AUD/USD levels
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.
