- The “risk on” phase has contoured into the second week of September as global geopolitical tensions ease.
- Positive news in early September regarding Brexit, the US/China trade war and from Hong Kong have seen stock markets advance higher.
- This positive news for the global economy has encouraged a push higher for the Australian Dollar, which tends to do well in a “risk on” environment.
- Furthermore, the US Dollar has been weakening, having been previously strengthened, as a safe haven.
- The combination of these factors has seen a strong AUDUSD advance, which is still aiming higher into mid-September.
AUDUSD: Solid consolidation leaves upside risks
A high-level consolidation Tuesday above .6835 support after Monday’s advance just above .6862/68 resistances and a push higher already this morning to .6885, still building on the earlier September last week surge through the key .6822 barrier (for an intermediate-term bullish shift), to keep the bias higher Wednesday.
The early September push above the key .6816/22 area set an intermediate-term bull trend.
- We see an upside bias for .6885; break here targets .6899 and maybe then towards .6917.
- But below .6835 quickly opens risk down to .6809.
Intermediate-term Outlook – Upside Risks: We see an upside risk for .6899.
- Higher targets would be .7000 and .7082.
- What Changes This? Below .6756 shifts the intermediate-term outlook back to neutral; through .6885 is needed for an intermediate-term bear theme.
4 Hour AUDUSD Chart