The market’s focus will be ping-ponging between major macroeconomic developments all around the world this week, and last night’s hotspot was clearly Australia, where the central bank met to discuss interest rates and monetary policy.
Because we’re entering what is historically one of the quietest periods for markets, we’ll be taking the opportunity to take a longer-term view of many major FX pairs and markets over the next two weeks, starting with AUD/USD today.
The weekly AUD/USD chart (below) looks stronger than it has at any point in the last year. As of writing, the rates are breaking above a 14-month bearish trend line near .7200 and approaching a three-month high around the .7400 handle. Meanwhile, the weekly RSI and MACD indicators have both turned higher to hit their highest levels in over a year.
After a broad-based dip at the start of the U.S. session, the greenback has come storming back over the last few hours. Naturally, this has caused the earlier bounce in EUR/USD to fade, though USD/JPY hasn’t seen much a corresponding rally.