Today we saw the US equities break beneath the current trading range. However, there was not enough momentum to force the market to continue in this direction, and it still remains above the up trending lows from the upward move that began in the middle of March. Today’s movement can be attributed largely to profit taking. Currency markets witnessed this same trend with the USDJPY gaining against the riskier currencies.
However, from a technical perspective the overall risk appetite move remains intact. Likewise, oil closed the day above $70 which is indicative of risk appetite. Therefore we are still looking to sell the USD and JPY.
Daily Currency Pair Analysis AUDUSD: We anticipate the risk aversion seen in the US session to continue into the European one. However watch US equities and look to buy the AUD on a move upward.
Potential Trade: AUDUSD buy Optimal Entry: 0.7850 Stop: Below 0.7750 Target: 0.8110