Currency market: AUD/USD and AUD cross pairs

Brian Twomey Brian's Investment

AUD/USD remains the last holdout currency to achieve target from long term averages. AUD/USD break at the 5 and 10 year averages from 0.7298 and 0.7934 targets 0.6881 and 0.6853. The market awaits resolution to AUD/USD as NZD/USD, EUR/USD, GBP/USD all broke long term averages and achieved targets. EUR/USD,GBP/USD and NZD/USD now trade deeply oversold.

All JPY currencies all trade safely above longer term averages as well as USD/CHF, CHF/JPY and USD/JPY. EUR/CAD, GBP/CAD, NZD/CAD and AUD/CAD trade safely below. GBP/AUD trades safely below while EUR/AUD trades below with strong resistance just above current price.

AUD/USD main conundrum is it lacks correlations to its cross pairs. AUD/USD Vs AUD/CHF correlates at -41%, Vs AUD/JPY at -41%, Vs AUD/NZD at -62%. Most vital to AUD/USD and to stop AUD/USD's further slide is the +95 correlation to AUD/CAD.

AUD/CAD is the top pair in the AUD universe at a 0.9060 exchange rate and 2000 pips from AUD/USD. The opposite pair to AUD/NZD is AUD/CAD and explains AUD/CAD's top position to AUD/USD. Both AUD/CAD and AUD/NZD are the exact same currencies separated by 2 different exchange rates.

Plus AUD/CAD traditionally is a dead mover currency and contains every ability to stop AUD/USDs downslide.

Generally by year dated to the 1960's, AUD/CAD trades roughly 700 ish pips per year. For 2022 and 5 months, AUD/CAD traded 600 pips, 1000 for 2021 and 800 for 2020. AUD/CAD for the current year trades within its historice range.

AUD/CAD is deeply overold and matches oversold AUD/USD. AUD/JPY and AUD/NZD trade deeply overbought while AUD/CHF is fairly neutral short and long term and trades by meandering alongside AUD.

AUD/USD's closest pair in the currency pair line up as middle currency is GBP/USD then bottom pair NZD/USD. EUR/USD fits into the AUD/CAD universe by a +44% correlation to AUD/CAD.

The bloomberg survey forecasts EUR/USD to parity and 0.9700;s. EUR/USd was introduced at 0.9800's in 1998 and traded above USD/CHF, AUD/CAD and DXY for all its 24 year existence. For EUR/USD yo trade at parity, it must cross below DXY. USD/CHF and AUD/CAD would be forced to drop to act as bottom supports.

Most prominent today driving the vast majority of our currency pairs are 50 day averages. AUD/USD's 50 day is located at 0.7365. Once AUD/USD bottoms, it contains a long way to travel higher.

Author

Brian Twomey

Brian's Investment

Brian Twomey is an independent trader and a prolific writer on trading, having authored over sixty articles in Technical Analysis of Stocks & Commodities and Investopedia.

EUR/USD faces next resistance near 1.1930

EUR/USD has surrendered its earlier intraday advance on Thursday and is now hovering uncomfortably around the 1.1860 region amid modest gains in the US Dolla. Moving forward, markets are exoected to closely follow Friday’s release of US CPI data.

GBP/USD change course, nears 1.3600

GBP/USD gives away its daily gains and recedes toward the low-1.3600s on Thursday. Indeed, Cable now struggles to regain some upside traction on the back of the sudden bout of buying interest in the Greenback. In the meantime, investors continue to assess a string of underwhelming UK data releases released earlier in the day.

Gold plunges on sudden US Dollar demand

Gold drops markedly on Thursday, challenging the $4,900 mark per troy ounce following a firm bounce in the US Dollar and amid a steep sell-off on Wall Street, with losses led by the tech and housing sectors.

Ripple collaborates with Aviva Investors to tokenize funds as XRP interest declines

Ripple (XRP) exhibits subtle recovery signs, trading slightly above $1.40 at the time of writing on Thursday, as crypto prices broadly edge higher. Despite the metered uptick, risk-off sentiment remains a concern across the crypto market, as retail and institutional interest dwindle.

A tale of two labour markets: Headline strength masks underlying weakness

Undoubtedly, yesterday’s delayed US January jobs report delivered a strong headline – one that surpassed most estimates. However, optimism quickly faded amid sobering benchmark revisions.

Aster Price Forecast: Demand sparks on Binance Wallet partnership for on-chain perpetuals

Aster is up roughly 9% so far on Thursday, hinting at the breakout of a crucial resistance level. Aster partners up with Binance wallet for the second season of the on-chain perpetuals challenge.