- Strong reversal of AUD / USD – Loses nearly 300 pips from weekly peak.
- Risk aversion particularly punishes the Aussie.
The AUD / USD continues the pullback and hit 0.7731 new lows in one week. The strong bearish tone remains high despite the fact that it has already accumulated 270 pips of decline from Thursday’s high.
The backward factor is behind a rise in the dollar in a context of strong aversion to risk and a fall in the price of various raw materials. Wall Street futures show stocks are heading for a negative open, far from recovering from yesterday’s slide.
The decline in both AUD / USD and stocks from multi-month highs (or record for stock indices), which implies that in addition to a correction there is a possible significant profit taking along the way. The pair momentarily traded above 0.8000, 24 hours ago. It is now around 0.7735.
The bond market and what happens on Wall Street will continue to be in the focus of operators. In addition, US data will be released including the January personal income and spending report and consumer confidence data.