AudUsd traded up to 0.7844 again on Wednesday, holding its ground and closing on its highs in what has been a fairly tight session. While the short term momentum indicators still look a little toppish, the dailies remain constructive and as elsewhere, the US$ looks set to remain under pressure although with the Aud now having lost its risk premium over the US$ I am wary of buying it at these levels.
1 hour/4 hour indicators: Mixed. — Possible topping formation.
Daily Indicators: Turning higher
Weekly Indicators: Neutral –Turning higher?
Preferred Strategy: The 4 hour indicators still look a little toppish so another move back towards 0.7800/0.7810 would not surprise but buying dips seems to be the plan. Stand aside. Further out, if the US dollar remains weak, a medium term move towards 0.8000 should not be ruled out. The AIG Services Index PMI and the Caixin China Services PMI will provide the initial direction today and a solid reading would allow for a run to take out stops above 0.7850.
Economic data highlights will include:
AIG Services Index PMI, Caixin China Services PMI
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