Aussie Dollar On A Wild Ride

The last 24 hours have been a wild ride for the Australian Dollar, very evident with the AUD/USD pair. After a halt to easing by the RBA yesterday, with 25 basis points priced in, the pair rallied off the 21hr moving average continuing into the European open and penetrating the 61.8% retracement. After ranging throughout the NY trading day with Senate Committee hearings underway, the pair traded down the 64 cent handle into the close and fell lower on S&P futures selling. The big move however came on the significantly worse than expected 4th quarter GDP reading (-0.5%vs. 0.2% QoQ; 0.3%vs. 1.2% YoY,) which pushed the pair over another 100 pips lower, through the recent lows.

The wild ride on the hourly chart looks significantly more tame on the daily, where the macro perspective seems more plausible in the short-term. With yesterday’s halt in easing and better than expected numbers preceding the GDP reading today, a moderate bid developing in Copper which is moving off its lows, has a better outlook for Aussie. Looking at the chart below we see the 2 tests of the 100day moving average and a 3rd on the 38.2% retracement looks doable.

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