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2 Dec 2014
AUD/USD squeezing out the less committed bulls
FXStreet (Guatemala) - AUD/USD is trading at 0.8451, down -0.59% on the day, having posted a daily high at 0.8545 and low at 0.8433.
AUD/USD has consolidated the fall from heavy supply in 0.8540/50 territory and is contained within 20 pips or so of a tight range on 0.8440-65 currently. We are seeing a reverse of yesterdays open as commodity prices take another hit.
Gold staged a relief rally yesterday but far exceeded expectations and added a further $30 or so onto its anticipated targeted performance but has given back that extra bit of mileage hovering around $1,200 currently and dropping back circa $18.50 on the day driven by US dollar demand and a squeeze in nervously long positions.
Oil demand has faded again and is sighted to damage resource-based economies such as Australia and China. Such concerns were eluded to in the RBA’s statement yesterday in respect to current prices in commodities in recent times. Also the concerns were ramped up over the price of the Aussie with the wording changing to “A lower exchange rate is likely to be needed to achieve balanced growth in the economy” – that word “needed” is what is most significant. Yet no target value in the price of Aussie has been indicated as yet, perhaps while the drop in Iron Ore from $135-$70 a tonne is still being digested in relation to their initial target fair value price of 0.8550 when Iron Ore was at $135 around this time last year in November 2013.
Meanwhile, technically, the picture remains bearish and the recent moves below the 0.85 handle again for a rest of this space opens up serious threats for the bulls down towards 0.8430, 0.8400 and 0.8380. Volatility will play out as markets digest and forward plan the current outcomes of the fundamentals while we now await the US jobs data and year ending FOMC.
AUD/USD has consolidated the fall from heavy supply in 0.8540/50 territory and is contained within 20 pips or so of a tight range on 0.8440-65 currently. We are seeing a reverse of yesterdays open as commodity prices take another hit.
Gold staged a relief rally yesterday but far exceeded expectations and added a further $30 or so onto its anticipated targeted performance but has given back that extra bit of mileage hovering around $1,200 currently and dropping back circa $18.50 on the day driven by US dollar demand and a squeeze in nervously long positions.
Oil demand has faded again and is sighted to damage resource-based economies such as Australia and China. Such concerns were eluded to in the RBA’s statement yesterday in respect to current prices in commodities in recent times. Also the concerns were ramped up over the price of the Aussie with the wording changing to “A lower exchange rate is likely to be needed to achieve balanced growth in the economy” – that word “needed” is what is most significant. Yet no target value in the price of Aussie has been indicated as yet, perhaps while the drop in Iron Ore from $135-$70 a tonne is still being digested in relation to their initial target fair value price of 0.8550 when Iron Ore was at $135 around this time last year in November 2013.
Meanwhile, technically, the picture remains bearish and the recent moves below the 0.85 handle again for a rest of this space opens up serious threats for the bulls down towards 0.8430, 0.8400 and 0.8380. Volatility will play out as markets digest and forward plan the current outcomes of the fundamentals while we now await the US jobs data and year ending FOMC.