Currency market: AUD/USD and AUD cross pairs

Brian Twomey Brian's Investment

AUD/USD remains the last holdout currency to achieve target from long term averages. AUD/USD break at the 5 and 10 year averages from 0.7298 and 0.7934 targets 0.6881 and 0.6853. The market awaits resolution to AUD/USD as NZD/USD, EUR/USD, GBP/USD all broke long term averages and achieved targets. EUR/USD,GBP/USD and NZD/USD now trade deeply oversold.

All JPY currencies all trade safely above longer term averages as well as USD/CHF, CHF/JPY and USD/JPY. EUR/CAD, GBP/CAD, NZD/CAD and AUD/CAD trade safely below. GBP/AUD trades safely below while EUR/AUD trades below with strong resistance just above current price.

AUD/USD main conundrum is it lacks correlations to its cross pairs. AUD/USD Vs AUD/CHF correlates at -41%, Vs AUD/JPY at -41%, Vs AUD/NZD at -62%. Most vital to AUD/USD and to stop AUD/USD's further slide is the +95 correlation to AUD/CAD.

AUD/CAD is the top pair in the AUD universe at a 0.9060 exchange rate and 2000 pips from AUD/USD. The opposite pair to AUD/NZD is AUD/CAD and explains AUD/CAD's top position to AUD/USD. Both AUD/CAD and AUD/NZD are the exact same currencies separated by 2 different exchange rates.

Plus AUD/CAD traditionally is a dead mover currency and contains every ability to stop AUD/USDs downslide.

Generally by year dated to the 1960's, AUD/CAD trades roughly 700 ish pips per year. For 2022 and 5 months, AUD/CAD traded 600 pips, 1000 for 2021 and 800 for 2020. AUD/CAD for the current year trades within its historice range.

AUD/CAD is deeply overold and matches oversold AUD/USD. AUD/JPY and AUD/NZD trade deeply overbought while AUD/CHF is fairly neutral short and long term and trades by meandering alongside AUD.

AUD/USD's closest pair in the currency pair line up as middle currency is GBP/USD then bottom pair NZD/USD. EUR/USD fits into the AUD/CAD universe by a +44% correlation to AUD/CAD.

The bloomberg survey forecasts EUR/USD to parity and 0.9700;s. EUR/USd was introduced at 0.9800's in 1998 and traded above USD/CHF, AUD/CAD and DXY for all its 24 year existence. For EUR/USD yo trade at parity, it must cross below DXY. USD/CHF and AUD/CAD would be forced to drop to act as bottom supports.

Most prominent today driving the vast majority of our currency pairs are 50 day averages. AUD/USD's 50 day is located at 0.7365. Once AUD/USD bottoms, it contains a long way to travel higher.

Author

Brian Twomey

Brian's Investment

Brian Twomey is an independent trader and a prolific writer on trading, having authored over sixty articles in Technical Analysis of Stocks & Commodities and Investopedia.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.