AUD/USD bounced to meet 1.0120 resistance during the London morning as the market continued the squeeze higher which was started during the Asia early afternoon. However, with risk sentiment decreasing across Europe as bond yields moved even higher the AUD fell back down to the 1.0030 support area. Solid buying from profit takers and range guys thinking the positive US data would see a correction back towards 1.0120 were mistaken as the pair topped out ahead of 1.0100 as commodities were hit with a new link to falling equity markets. Late in the US afternoon the 1.0030 support gave way with momentum selling kicking in and we are now closing the day just below parity. Data free Friday yet again and with the bearish tone of the equity markets AUD could come under pressure. However, with Sterling and Euro holding in overnight we could see some punters willing to buy AUD as a high risk reward trade but we will leave that to them. We missed out on turning bearish on the short term bias overnight as our 1.0150 target wasn’t meet so we will continue with the medium term position for now.

Compass Direction

Short-Term    Medium-Term

NEUTRAL        BEARISH

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