AUDUSD benefited slightly from the positive outcome of the G20 meeting, but the increasing prospect of interest rate cuts in Australia are preventing a stronger recovery rally. Traders will be keeping a close eye on the 200 MA, which is around 0.71 at the moment, for signs if the Aussie Dollar can recover on the back of improving sentiment in global markets. To the downside, a break back below the 0.6920-40 area could potentially be seen by traders as a sign that the downtrend will resume.
Gold was hit hard at the Sunday Open and fell briefly below $1380. The precious metal has recovered since then, and has cleared resistance between $1398 and $1402. Momentum remains relatively strong, and Gold bulls are targeting the previous high of $1439. The focus is clearly on the US Dollar, and as long as rate expectations are falling, Gold has the potential to extend its uptrend.
USDJPY started strongly into the new trading week, but is struggling as the weak US rate expectations continue to weigh on the currency pair. It recently fell below the 21 DMA, and a break below the 108 figure could potentially lead to further position covering. The key level to watch to the downside is 107.20 and 106.80.
EURCHF is slowly picking momentum as risk appetite is improving. The currency pair is currently testing the 21 DMA and the next bull target above that line would be the 200 DMA around 1.1315. Positive RSI divergence is seen on the Daily chart, which gives CHF bears some additional confidence.
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Soaring US yields trigger the wrecking ball effect as yields become a source of volatility for risk, rather than a source of support