AUD/USD Intermarket: iron ore correlation a negative risk on the week
|Currently, AUD/USD is trading at 0.7631, down -0.60% on the day, having posted a daily high at 0.7680 and low at 0.7625.
AUD/USD is consolidating the reversal of the March rally from 0.7490 to 0.7750 recent highs. The markets are starting compound the recent bearish bias in the US dollar while the recent hawkish shift from the RBA is also supportive of the Aussie. However, the AUD has been the underperformer in the G10 basket again, pressured as iron ore fell for the third day yesterday. There was a slight recovery in iron ore from 47 to 48.48 but the downside has resumed again today to 47.49.
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AUD/USD levels
Another bearish close in iron ore and gold on the offer today could push the Aussie below the 200 4hr EMA at 0.7621 opening up the downside to the March lows of 0.7490. However, the US dollar's tone is negative.
"The intraday Elliott wave counts are conflicting and we have no real strong bias intraday," explained analysts at Commerzbank. "Should a rise as well as daily chart close above the 0.7778 level be seen, the April 2016 high at 0.7836 would be in focus.
Longer term outlook neutralising:
"The market remains capped by the 0.7778/.7850 2016 highs and the 38.2% retracement, but it is possible that it is base building. Where are we wrong? Above .7850 would target the 200-month ma at 0.7940."
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