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16 Sep 2013
AUD/USD blows stops above 0.9350, break to fade?
FXstreet.com (Barcelona) - As the frenzy to sell the US Dollar continues, one pair in particular just cracked a critical tech level, as the AUD/USD surge saw stop above 0.9350 tripped, rising as high as 0.9390.
The break through major resistance communicates a potential bullish development for the pair. However, the break occurs under thin market volumes, which means not a big number of orders were needed to make that push higher. Breaks are always the most relevant when most market participants have a 'say' on it, thus the breakout in early Asia should be taken with a grain of salt.
Sean Lee, Founder at FXWW, wrote the following consideration at the FXWW chat-room: "100-day SMA at 9370 but break above 9350 could form basing pattern? Best wait and see if this is just stop-driven move in iliquid markets." As a reminder for traders, today is a holiday in Japan, which implies low volume levels until European trading.
As these lines are being written, the AUD/USD is starting to show signs of weakness, off 50 pips from its session high at 0.9390.
Overall, risk still appears to be for some attempts to fill the massive gaps down in all things U.S. Dollar later on the day. Even if some pairs fail to do so, all things equal, there are a handful of currencies more vulnerable to fulfill such expectations.
If judging by last week's AUD performance, on the back of poor labour data, the currency is a serious contender to lead the pack for a retracement back to Friday's closing levels. The Yen, after a US/Russia diplomatic deal on Syria, should follow close behind.
The break through major resistance communicates a potential bullish development for the pair. However, the break occurs under thin market volumes, which means not a big number of orders were needed to make that push higher. Breaks are always the most relevant when most market participants have a 'say' on it, thus the breakout in early Asia should be taken with a grain of salt.
Sean Lee, Founder at FXWW, wrote the following consideration at the FXWW chat-room: "100-day SMA at 9370 but break above 9350 could form basing pattern? Best wait and see if this is just stop-driven move in iliquid markets." As a reminder for traders, today is a holiday in Japan, which implies low volume levels until European trading.
As these lines are being written, the AUD/USD is starting to show signs of weakness, off 50 pips from its session high at 0.9390.
Overall, risk still appears to be for some attempts to fill the massive gaps down in all things U.S. Dollar later on the day. Even if some pairs fail to do so, all things equal, there are a handful of currencies more vulnerable to fulfill such expectations.
If judging by last week's AUD performance, on the back of poor labour data, the currency is a serious contender to lead the pack for a retracement back to Friday's closing levels. The Yen, after a US/Russia diplomatic deal on Syria, should follow close behind.