In many ways an extraordinary day – particularly for the AUD/USD which has posted a huge candle on the daily chart. In fact the three main USD pairs David & I follow, namely the EUR/USD/ GBP/USD & AUD/USD have all ended in positive territory – with the Aussie the clear leader!!
All three have, of course, benefited from relentless USD selling, and for a view of whether this is set to continue we will have to wait for tomorrow’s advance GDP release and also the FOMC. The USD is certainly over extended on the medium term time frames (30 and 60 min) as can be seen on the currency strength indicator alongside the chart above. However, as we’ve seen with the Aussie today, a currency can stay over extended for very long periods of time. In the higher time frames there is still some room for the USD to fall even further. Indeed the monthly chart for the USD index is currently setting up a major two bar reversal – aka a shooting star candle
As we move into the US close and Asia – the focus is on the Kiwi where the ANZ Business Confidence number is due for release.