AUD/USD: Buying dips now favoured in shortish-term
Yesterday’s RBA decision certainly surprised me and I’m still sitting on my medium term short position but I’m not feeling so confident anymore. Nevertheless, we can expect some volatility when the US election results start flowing later today and hopefully I can trade my way in and out once that movement starts.
Reserve managers are reportedly looking to buy now around 1.0350 so that says to me that levels near 1.0370 will probably find plenty of buyers (like me 🙂 ) and the obvious technical target is the top of the weekly wedge near 1.0600 (hopefully it doesn’t go there in a hurry).
An Obama win in the election will probably be mildly risk-negative in the short-term (compared with Romney) but also mildly USD-negative (more Bernanke) so that’s overall AUD neutral. A Romney win would be seen as risk-positive so good for pairs like AUD/JPY in particular.