As most forex traders know, the Australian dollar is generally closely correlated with base metals such as iron ore and copper that has managed to stabilize over the last few days.
Yesterday, the Aussie surged in reaction to a spike in crude oil prices and reports of increased iron ore exports. A weaker U.S. Dollar also contributed to the rally.
Today, copper and AUDUSD is trending higher at the same time. I expect this rally to continue in the next two trading sessions before any downside correction. In particular, AUDUSD seems to target 0.7465 at the end of today’s trading session. The short term upside correction is positive because the price is still in the upside price channel on AUDUSD H1 chart.
I entered some long positions as AUDUSD made a strong rebounce from 0.7395. However, note that a break below this support will trigger selling orders and this currency pair is expected to drop toward 0.7330 in short term.
By Jack Huyn