AUD/USD: Reaching New 10-Month Highs

AUD/USD: Reaching New 10-Month Highs

20 April 2016, 18:18
Roberto Jacobs
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AUD/USD: Reaching New 10-Month Highs

AUD/USD was lifted on a better risk sentiment in the European session and a positive close in the Nikkei that finished up 0.19%. Oil has been the catalyst along with flows through the yen.

With oil prices tailing off overnight, the Yen picked up the bid. Consequently, AUD/JPY climbed higher once a turnaround came in the price of oil and pulling AUD/USD back into bullish territory, and this has been the play for a number of sessions now. Meanwhile, there are some conflicting announcements in respect of timings of another OPEC and non-OPEC nations meeting to potentially revive an output freeze discussion.

All about Oil

Deputy oil minister of Iraq announced that OPEC and other oil producers will meet in May while Russia have said there is no agreement to meet in May. Nonetheless, Oil is higher on the prospects of an oil freeze meeting taking place, rallying to $43.30 spot WTI so far and Aussie bulls are chasing the bid to fresh highs this week and 2016 so far of 0.7829, a new 10 month high. This news has underpinned the bid in the oil price post the EIA weekly oil inventories that showed less of a build at +2080k vs 3000k expected and +6634k prior.

AUD/USD levels

With AUD/USD back above 0.7800 again and iron ore remaining supportive (ITIJ16 (Apr '16) now above 58.00 and ITIK16 (May '16) now at 62.97 up, +3.23 ), we should see further appreciation. Supported by the 20 dma at 0.7634 on the wide, AUD/USD targets R1 at 0.7862, R2 at 0.7881 and R3 at 0.7901. The 100 weekly sma is located at 0.7934.

(Market News Provided by FXstreet)


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