The break to the topside in AUD/USD shows little sign of relenting. AUD/USD short time ago made a record post float high of 1.0348, pulling up just shy of reported barriers at 1.0350. The whole world is now bullish for the AUD but they are repeating reasons that have been around for quite some time to substantiate their view. The move of course in the last fortnight has been twofold. Relentless buying from a UK name started the ball rolling (generally accepted as being a M&A transaction but no one knows for certain) which swept aside previous strong resistance at 1.0200. This forced players to cover with many buying topside AUD/USD strikes thus countering topside barriers placed every 50 or so pips. The second reason is JPY weakness which has been pronounced against all and sundry.
It might be a little misleading to look at AUD/JPY in isolation because it was definitely reason number one that kicked start this move. That said there has been some mighty big calls in JPY crosses this week from the investment bank community – EUR/JPY +126, AUD/JPY +90. All up we may have a lot further to run but it is unlikely to be in a straight line.
