The lack of volatility in the FX market is not only helping the really high yield emerging market pairs, but also putting a further bid in the AUD, CAD and NZD...

Chris Weston

Pepperstone

The lack of volatility in the FX market is not only helping the really high yield emerging market pairs, but also putting a further bid in the AUD, CAD and NZD (or bloc currencies). AUD/USD has broken the 61.8% retracement of the October to January sell-off at 0.9339 and while it is starting to get overbought could be eyeing the November 20 high of 0.9447 over the coming weeks. Shorting is ill advised and while a pullback will happen soon, this look likely to be shallow and well supported. It's worth remembering the Korean exports (released last week) grew 5.2% and they are a really useful guide to China's exports, as the correlation over the years is strong. The key risk to AUD longs here is the Fed minutes at 04:00 and I expect them to be hawkish


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Chris Weston
Chris Weston
Head of Research
Pepperstone

Highly accomplished financial markets professional, with experience at a number of top-tier global institutions on both the buy and sell-side. A natural communicator with a strong ability to analyse macro-economic trends, capital flows and market...

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