The Australian Dollar (AUD) – USD cross is gaining extremely bullish momentum. Having passed the crucial 0.6500 level, it is now shooting for higher ground above 0.6550. This represented a significant rebound after a deep drop on Friday. This jump in AUD/USD is propelled by continued USD weakness. This transformation in conjunction with a somewhat persistent risk-on environment across capital markets has increased investor optimism.
On Monday, AUD/USD built solid bullish momentum, quickly erasing last week’s losses. Intra-day market analysts have identified a key resistance area for AUD/USD at 0.6690. If the trend is your friend and this holds true, then there’s great promise for expansion in the future! The latest slide in the Greenback’s value has helped propel the Australia dollar to renewed heights. With that support it has found its footing again, like other risk-sensitive assets.
Aside from the AUD/USD swinging back and forth, gold has been hammered. It has declined to daily lows near $3,380 per troy ounce. The metal has held all of its offered position since Monday, which is a surprise with how risk-on the markets have been. Gold prices continue to drop amid easing tensions across the Middle East. This shift has historically pulled the demand for gold as a safe haven in the opposite direction.
Recent movements in gold prices are linked to a lackluster turnaround in US yields. This new development has enormous implications for the market. Additionally, US yields have softened, further complicating gold’s upward momentum. Together, this change is pushing investors out the risk curve to riskier assets such as equities and commodities.
With all the EUR/USD volatility making headlines, the Euro (EUR) is heating up. It has just rocketed back above that 1.1600 level against the USD yet again. EUR/USD couldn’t follow through with its move north, a sign that the market is potentially hesitant to keep this upward momentum alive. This stagnation is both a symptom of overall market conditions and illustrates the uncertain term market environment investors are being presented with right now.
The general market condition is still very much unclear, with traders trying to decide what signs are affecting currency gains and losses. The note additionally points to the weakening USD and a changing investor attitude. In response, they’re increasingly moving to safer currencies like the AUD and EUR instead of seeking refuge in traditional safe havens.