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AUD/USD squeeze risk growing?With tentative signs of stablisation in commodity futures and US equity index futures pushing higher in early Asian trade, the prospects for some form of squeeze higher in AUD/USD appear to be growing. You can see just how violent the selloff has been over the past two weeks, leaving it oversold on RSI (14) for the first time since August 2023. But the modest reversal on Thursday after breaking the 61.8% Fib retracement of the April-July low-high is about the closest thing to a bullish signal we’ve seen for the AUD/USD in a while. It’s tempting to go long with a stop below the fib level for protection, but it would be nice to see RSI break its downtrend first to provide confidence that the bearish price momentum is ebbing. Given the acute focus on China, the reaction to the PBOC’s CNY fix in FX markets, and opening of Chinese stock futures, may provide a strong tell on where the near-term path of least resistance lies. If they open firmer, it may increase the probability of AUD/USD upside. AUD/USD a proxy for risk appetite The chart also shows the rolling 10-day correlation between AUD/USD with COMEX copper in orange, crude oil in black, S&P 500 in green and Nasdaq 100 futures in blue. Every single correlation sits north of 0.8 with three of the four hovering around 0.9 or higher. The higher the score, the greater the relationship between the two variables. Taking a step back, the strong correlations suggest AUD/USD is being used as proxy for risk sentiment, a role it has often played previously when we’ve seen boarder risk-on-risk-off moves in markets. That means if we see even a modest improvement in risk appetite, as seen on Thursday when the latest batch of US economic data suggested premonitions of an imminent recession may be misplaced, the AUD/USD could find buyers. The price action in commodity futures is another potential sign that the worst of the rout is over, at least for the moment.
Long
by WHSelfInvest
EUR/JPY Poised for Trend Continuation: Breakout ImminentThe EUR/JPY pair has shown strong bullish momentum and has already broken out of the recent inside days. The pair continues to respect the ascending trendline and has moved above previous resistance levels. Traders should monitor the potential for further upward movement while practicing proper risk management, with a stop-loss placed below the recent support. Stay tuned for updates as we track the progress and potential targets for this breakout.
Long
by GlobalMarketGuru
USD/JPY grinds higher despite a weaker DXY Ahead of a busy week, the the US dollar index has started Monday's session on the backfoot, largely thanks to a relief rally on the EUR/USD exchange rate. But against currencies where the central bank is more dovish than the Fed – most notably against the likes of the Japanese yen and Chinese yuan - the dollar remains supported. After Friday’s latest inflation data (core PCE price index), which was bang in line with expectations, more key US economic data is to come over the next couple of weeks. The June non-farm jobs report is due on Friday, followed by the CPI on July 11. This week’s other important data releases include the ISM manufacturing and services PMIs, ADP private payrolls, JOLTS Job Openings, and FOMC minutes. Given how the USD/JPY has been able to grind higher despite some weakness in US data, it is not unreasonable to expect that trend to continue unless the BOJ/MoF potentially intervenes in FX markets. Key support comes in around 160.00 now, which was the previous multi-decade high that was hit in April. Below this level, there is not much in the way of obvious support levels to watch until 157.70 area. Meanwhile, on the upside, the 127.2% Fibonacci extension level of the drop from April high comes in at just below 162.50, making this our next bullish objective for this pair. By Fawad Razaqzada, market analyst at FOREX.com
by FOREXcom
DXY in a critical area.. TVC:DXY - Is in a critical area now almost completing an ABCD rally. Why its so critical is that if it fails in this area then it will likely drop down to the 102.00 area. In turn this will likely give the Indices that one last push higher to complete patterns. If it starts rallying through the 104 level then we will likely see a run to the bigger upside pattern at 108-109 area which will give us a deeper correction in the Indices and likely GOLD. 🧐🧐 Big few days ahead.. 💰💰
TVC:DXYShort
by L_F
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