The AUD USD followed the strength in the stock market most of the dayas trader’s increased demand for higher risk, higher yielding assets. The closing price reversal top may be signaling a major top.
The AUD USD followed the strength in the stock market most of the day as trader’s increased demand for higher risk, higher yielding assets. The Aussie tried to ignite a breakout to the upside when it posted a new high for the year following a trade through .7326 but failed to run stops or attract fresh buyers. This could be a sign the market has reached an overbought level.
News that Chrysler was declaring bankruptcy triggered a sell-off in U.S. equity markets which triggered weakness in the stock market late in the trading session. This action gave Aussie bulls an excuse to book profits and ignite a sell-off.
Technically, a closing price reversal top was formed at .7382. A trade through .7231 will confirm the top and could trigger the start of a major top.