It’s always worth watching the market sentiment, and its reaction to economic events. If an indicator came out above expectations, and the currency was not able to show a strong appreciation, it’s the sign of a looming retreat. Today we saw better than forecasted labor data out of Australia, and AUDUSD is not able to hold its initial gains.
If there is a single trigger driving the currency up, wait for correction. Yesterday, the only driver of AUDUSD jump was large option expiry. That’sit.
If an asset having strong correlation with a currency is going up, and the currency lags behind, it’s time for retracement. Today Gold , playing a big role in lives of both Australian economy and Australian currency, added 0.22% during the day. And AUD is tittering around 0%.
I think it’s time to sell AUDUSD with initial target at 0.7880, followed by 0.7840 if broken.