Friday AUD/USD Futures contracts traded 55.400 or USD 277 billion and Open Interest runs USD 46 billion. Overall, 55,00 contracts is quite low since the 168,000 experienced December 15 at Contract expiration and rollover to March 17. Further 55,000 is the lowest traded since before November 22. OCR volume in comparison December 16 traded 6,098 million in Australian dollars. Thursday December 22, OCR traded 4,061.
Important developments upcoming for Australia is a continued study to revamp interest rates and consistent with the vast majority of central banks whose interest rates were overhauled and currently trade under new systems. The second aspect is Australia and New Zealand interest rates will begin to trade across borders, consistent with Europe’s Eonia for example. Currently, Australia and New Zealand trade about 200 billion per month in Australia and New Zealand Interest rate and interest rate derivatives.
Two significant break points for AUD/USD are located at 0.7092 below and 0.7215 above inside a 123 pip range. Above 0.7215 then next vital levels are found at 0.7222, 0.7228, 0.7230 and the top at 0.7248. At 0.7092 supports and vital levels are located at 0.7095, 0.7090, 0.7080 then a break of 0.7080 next comes 0.7061.
AUD/USD is not only oversold but the current price at 0.7169 is extraordinarily low. And extraordinarily low means current to long end of the price curve. Short term, AUD/USD struggles Vs USD for dominance and its the aspect containing significant AUD/USD moves. Longer term, USD is at severe tops but short term its price is low.
Why Australia OCR and AUD/USD exchange rate lack Correlation at the 1 and 2 month monthly averages are based on the short AUD/USD ranges and struggles against USD. The lack of Correlation and AUD struggles V USD led to an AUD/USD price and OCR at severe misalignment. The AUD/USD price should be far higher but the internal struggles forces short range trading and subject to outside Australia market influences.
An important break point for on the way higher for AUD/USD is 0.7205. A break and hold would lend much confidence in a higher AUD/USD price.
Brian Twomey, Inside the Currency Market, btwomey.com
The Z Score book, this is a great book, fell free to make your purchases,