In my biased opinion, the AUD is looking extremely oversold against the USD, NZD, GBP and especially the JPY. All of these crosses are showing decent risk-reward possibilities for the contrarians amongst us.
AUD/JPY did break below previous lows at 81.90 but if these levels are re-taken then the bears will question the strength of momentum in the market.
AUD/NZD did spend some time on the 1.05 handle but again, failure to consolidate those losses could be an indicator of dwindling momentum.
GBP/AUD will encounter strong technical resistance near 2.10 and with the GBP increasingly friendless, it will be interesting to see just how convinced the market is with it’s China proxy trade.
I’m long AUD/USD and will start adding again if we can build an hourly base back above .6980. Risky for sure, but the risk-reward looks compelling.
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