Australian dollar strong again, where to buy it
AUD/USD climbed 60 pips from the Asian low to the best levels since August 19. Last at 0.9321 but with some sellers at 0.9335 according to our orderboard.
The big story in the FX market in the past 6 weeks has been the US dollar rally but the Australian dollar has been almost as strong since July 10.
During that time the Australian dollar has had to shake off a few negative headlines but Stevens’ hint that rates won’t be cut further last week is key.
Traders are piling into US dollars and at some point a shakeout is inevitable. Maybe it’s better to get in the second-best currency on one of the crosses. AUD net positioning in the CFTC report is a net long but still well below the extremes of the past few years.
The spot I would look is AUD/JPY. After 4 months of consolidation the pair looks to be breaking out to the upside and poised to challenge the 61.8% retracement of the 2013 decline.