Investing.com - Financial Markets Worldwide
Get 40% Off
Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

AUD/USD: Could The Pair Break Below Long-Term Moving Averages?

ByBrian Twomey
Published 05/09/2022, 05:36 AM
Updated 09/03/2023, 03:41 AM

AUD/USD remains the last holdout currency to achieve its target from long-term averages. AUD/USD broke through at the 5 and 10-year averages from 0.7298 and 0.7934 targets 0.6881 and 0.6853. The market awaits resolution to AUD/USD as NZD/USD, EUR/USD, GBP/USD all broke long term averages and achieved targets.

EUR/USD, GBP/USD, and NZD/USD Deeply Oversold

All JPY currencies all trade safely above longer term averages as well as USD/CHF, CHF/JPY and USD/JPY. EUR/CAD, GBP/CAD, NZD/CAD and AUD/CAD trade safely below. GBP/AUD trades safely below while EUR/AUD trades below with strong resistance just above current price.

AUD/USD's main conundrum is it lacks correlations to its cross pairs. AUD/USD Vs AUD/CHF correlates at -41%, Vs AUD/JPY at -41%, Vs AUD/NZD at -62%. Most vital to AUD/USD and to stop AUD/USD’s further slide is the +95 correlation to AUD/CAD.

AUD/CAD is the top pair in the AUD universe at a 0.9060 exchange rate and 2000 pips from AUD/USD. The opposite pair to AUD/NZD is AUD/CAD, which explains AUD/CAD’s top position to AUD/USD. Both AUD/CAD and AUD/NZD are the exact same currencies, separated by two different exchange rates. Plus, AUD/CAD is traditionally a dead mover currency and contains every ability to stop AUD/USD's downside.

Generally, by years dated to the 1960s, AUD/CAD trades roughly 700 ish pips per year. For 2022 and 5 months, AUD/CAD traded 600 pips, 1000 for 2021, and 800 for 2020. AUD/CAD for the current year trades within its historic range.

AUD/CAD is deeply oversold and matches oversold AUD/USD. AUD/JPY and AUD/NZD trade deeply overbought while AUD/CHF is fairly neutral short and long term and trades by meandering alongside AUD. AUD/USD’s closest pair in the currency pair line up as the middle currency is GBP/USD, then the bottom pair NZD/USD. EUR/USD fits into the AUD/CAD universe by a +44% correlation to AUD/CAD.

The Bloomberg survey forecasts EUR/USD to parity and 0.9700;s. EUR/USD was introduced at 0.9800’s in 1998 and traded above USD/CHF, AUD/CAD, and DXY for its 24-year existence. For EUR/USD to trade at parity, it must cross below DXY.

USD/CHF and AUD/CAD would be forced to drop to act as bottom supports. 50-day averages are driving the vast majority of our currency pairs. AUD/USD’s 50-day is located at 0.7365. Once AUD/USD bottoms, it contains a long way to travel higher.

Latest comments

Install Our App
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.