The week between Christmas and New Years’ doesn’t have to be boring. At least in Australia, it isn’t that cold: it’s midsummer in the land down under. And also the Aussie is enjoying the heat.
AUD/USD is trading around 0.7750, up from 20 pips on the day and enjoying a week of consecutive advances. The pair currently trades at the highest levels since October 25th. On that day, Aussie/USD fell sharply and broke below the 0.7730 level which was a swing low earlier in October.
The next line of resistance is 0..7785, a level of support that was seen earlier, and that is followed by 0.7880 and 0.79, Will the A$ reach higher before the end of the year? Support awaits at 0.7730, 0.77, and 0.7640, lines that were visited quite recently.
Why is the Aussie rising? There hasn’t been any significant economic release from Australia nor from the US over Boxing Day. Commodity prices are not going anywhere fast. Bloomberg’s commodity index is going nowhere but actually falling.
So, the move looks like some end-of-year adjustment. Perhaps, portfolio managers are short of Australian financial assets such as stocks and bonds, and may not be adjusting ahead of the deadline.
More: Top Trades For 2018: Buy EUR/USD, Buy AUD/NZD, Sell USD/CAD – SocGen