Saxo Bank | Sep 10, 2014 04:28AM ET
The AUDUSD chart has suddenly transitioned from boring, rangebound behaviour to a sudden avalanche to the downside on the break of the key range and semi-head and shoulders formation. AUD testing below 0.9000 The next major targets are shaping up not far below 0.9000 now that the 200-day moving average has been punctured. Interesting to note that the AUD downside is vastly outpacing the latest action in EURUSD, where the action may be congealing a bit and where it is quite possible in a risk-averse environment that we see EURUSD relatively stable while the euro tracks the USD as it storms higher against the smaller currencies. Let’s have a look at the EURAUD chart and consider what this means. Chart: EURAUD A strong snapback from the post-European Central Bank meeting lows suggests that the downside action in EURAUD may be overdone in the near term. I suspect that we are seeing a bit of the euro’s negative correlation with risk appetite showing here as yesterday saw a rather weak session on Wall Street, though much of the action is due to AUD weakness. I am biased for upside if risk appetite weakens further in the near term. 1.4000 could shape up as a major support if the action pauses, or the squeeze could continue unabated if we see a weak employment report out of Australia tonight.
Upcoming Economic Calendar Highlights (all times GMT)
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.