Technical Markers Point To AUDUSD Bull Trend

The AUDUSD continued to trend higher Friday night after the post-US CPI jump on Thursday. It is currently trading around 0.6700, the highest in almost 2 months. This was predominantly driven by the weaker USD, which is now down 4.1% from Thursday’s high.

• AUDUSD broke through the initial resistance of 0.6695 and then 0.6705 (September 21 high) but couldn’t maintain it. 0.6768 is a level to watch, as a break would be a 61.8% retracement of the August 11 – October 13 downleg. AUD has confirmed a clear break of the 50-day EMA, which signals scope for an extension of the bull cycle.
• While up against the USD, AUD did underperform the G10, apart from GBP and CAD. AUDNZD fell to 1.0951 Friday night but has begun today higher at just under 1.100. AUDEUR is down to 0.648, while AUDJPY is fairly stable at 93.03.
• Equity markets were up across the board Friday night, except for the FTSE, as the risk rally continued. The S&P 500 rose 0.9% and the Euro Stoxx +0.6%. Base metals also posted a broad-based rally with the LME index up 3.7% and at its highest level since August 11. Oil came off of its intraday high on Friday to end the session at $88.86/bbl still up 2.8% on the day. Iron ore prices also rallied and are now around $92 and could go higher after China announced a 16-point plan to rescue its property sector.
• No data or events in Australia today. The RBA publishes the minutes from its last meeting tomorrow.