Friday, May 10, 2013

There she goes. As anticipated, AUDUSD breaks through support

As anticipated by Omicron Forex, the AUSUSD pair has convincingly dropped through the well defined support level around 1.015. On this occasion it is the second element of the pair or the quote currency, the US dollar, that is the driver of sentiment. The greenback has been on fire relative to the Japanese Yen for a little while now, ever since a new political will has emerged in Japan to weaken the Yen:

What is of interest now is the fact that the USD dollar responded so well to good jobless claim figures in that country yesterday. This represents a departure from the logic that drove the USD up on bad news, on the grounds that it is the currency that traders go to when the global economy might look vulnerable, and risk is off. Its rise on good news can only raise suspicions that Quantitative Easing in the US is, once more, a candidate for being wound down and eventually discontinued.

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