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AUD - the strongest currency on the block

Five key markets in focus today.

AUD/USD

I have been highlighting bullish AUD positions of late and feel price action in AUD/USD is looking good for additional longs from here. The pair has closed above the 200-day moving average at 0.9139 and also the neck line of the head and shoulders pattern. Over the next month or so we could see a move to the 0.9400 level, although the head and shoulders pattern would target 0.9580. Glenn Stevens speaks today at 14:30 AEDT and his comments could push the pair around. If long, traders would look to stay long in this pair.

EUR/USD

The pair saw some fairly whippy price action yesterday with speeches from a number of key ECB members. The interesting speech came from Oliver Weidmann of the German Bundesbank. Mr Weidmann is known as the most hawkish member of the ECB, so when he talks about using negative deposits as a method to counter EUR strength, the market listens. I have closed my EUR/GBP long for a small profit, as I feel there are much better opportunities elsewhere and the pair is not really doing anything. As each day goes by, EUR/USD is looking like a shorting opportunity and I maintain that the pair is likely to test the 1.30 level over the coming 12 months.

AUD/NZD

AUD/NZD played out as expected and hit my limit of 1.0700 after trading fifteen points above. I close out for a 95 pip profit and revert to the side lines, but would still hold a positive bias and a further pullback could be a good buying opportunity.

Lean hogs

After hitting a high of 12,638 hogs have started heading lower. I have highlighted this commodity as one that was severely overbought and the pullback has played out as expected. The trend is still higher so the market will be keen to buy the dip, so if short be careful because if the pullback we are seeing is purely profit taking, then buyers will be keen to get back in at better levels.

Nufarm (NUF)

Price action in the pair is looking favourable for longs right now and this would certainly be my directional bias with a potential stop at $3.75. Today’s 1H 14 earnings numbers look very strong indeed relative to expectations, with reported NPAT some 77% above the same period last year, and 16% above the analysts’ expectations.

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