AUD/USD opened the morning session managing to hold onto the overnight gains but as Tokyo Traders entered the market with risk off trading taking control on reports that the brokerage house MF Global is in a much more serious position than first thought taking the price to 1.0655. Profit taking was also seen and as expected Asia traders were trying to sell with an intraday view. Trend line support managed to hold up the market as the Euro and Sterling managed to trade slowly, giving up minimal European and US session gains. The price currently sits at 1.0664 and looking more than likely for the early Europeans to test the support line again and possibly getting the trailing stops. The signals are still looking for the currency to head south but with the fickle state of price action and likely case of low liquidity we could see action more towards a seesaw pattern which wouldn’t be good for trend traders. A break now above 1.0750 could see the price manage a 1.0850 top but this does look unlikely for today.

Compass Direction

Short-Term     Medium-Term

NEUTRAL      NEUTRAL

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