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Shorting has been painful with equities rallying

Four key markets in focus today.

Australia 200 (ASX 200)

Our call for the open today currently stands at 5400, which is 26 points shy of the 61.8% retracement of the all-time high of 6851 to the GFC low of 3120. We expect resistance to kick in at this level given how it respected prior key retracement levels. Global equities are on fire right now and shorting has been painful. An open at 5400 would mean the index has gained 282 points or 5.5% since the pivot low on October 9. It will also be up for a seventh day.

AUD/USD

The USD was sold heavily in US trade after the US non-farm payrolls came out lower than expected. AUD/USD has now retraced 50% of the falls from the April high of 1.0582 to the year’s low of 0.8848. At 11:30 today we get Q3 CPI and this could have big ramifications for the AUD. Analysts expect inflation of 1.8% on the headline print, while the RBA looks at the trimmed mean metric and that is expected to increase 2.1%, right at the bottom end of the RBA’s range. A number below 2% (trimmed mean) could send the AUD lower.

BHP

The miner should have a positive open given the moves in commodity prices and global leads. The daily MACD is about to break above the zero line, which would be positive for the stock, while traders will be keen to look out for a break of the recent high of $37.41, where it will then target the year’s high of $39.34.

GBP/USD

Traders will be keen to look out for the upcoming BoE minutes at 19:30, although most don’t see this being a major driver. The pair hit a high of 1.6249 in US trade, just shy of the October 1 pivot high of 1.6261. A break of this level would target 1.6389 (the year’s high).

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