AUD session outlook July 10th; short-covering picking up pace
The market has sold a lot of AUD/USD in recent weeks and the big question is, where will the big trailing stops be situated? I’m hearing that they will be above .9270 and again above .9360, and that certainly makes sense when you look at the charts (see chart). The AUD short-covering has already begun in earnest against the EUR, GBP, CHF and JPY and against this back-drop, I feel it’s inevitable that the AUD/USD will break higher in the short-term.
There are a few risk events today with BOJ minutes, Australian consumer confidence and Chinese trade. Yesterday’s data seemed to confirm an August RBA rate cut yet the AUD has rallied; when a market rallies on bearish news then you really need to take heed!
AUD/JPY should be one of the lead pairs in Asia and the technical close above 92.50 is an interesting development.