The past two days illustrate how far the Australian dollar has moved away from the risk trade. It was slightly higher yesterday in the risk rout and is slightly lower today in the risk rebound. The correlation broke down a long time ago but the moves confirm it’s dead and buried.
The market had to contend with the RBA decision today and aside from a 60-pip swing for no particular reason at all, there wasn’t much to take away. Stevens talked down the Australian dollar but the central bank is in wait-and-see mode. Today, a look at Q4 GDP is due and the market expects 0.7% q/q growth after a 0.6% rise in the third quarter. The report could move the market but with the data is stale so it won’t be a long-lasting AUD move.
The lack of news and correlations gives technicals a chance to shine and the 55-day moving average has been pivotal recently. Yesterday, AUD/USD touched below the 55-dma but closed above it and today it held again. It’s very early but a small series of higher lows is also building in AUD/USD. It would take a break of the Jan high.
AUD/USD daily
