• The market reaction to the Australian budget was quite strong;
  • US Treasury yields continue to slide;
  • Struggling iron ore prices are being ignored;
  • Charts are showing a period of bullish consolidation.

On the cautious side:

  • Yen crosses are starting to look susceptible and AUD/JPY bulls will need to be wary of a sharp downside clean-out.

I’d suggest that we continue to build long positions inside of a broad .92/.95 range which will eventually break higher towards parity. This could take weeks/months as market momentum is weak and the short-term speculative market smells a bit long.