Selling AUDUSD – Forex Trading Tips

We like selling AUDUSD after weak NAB Confidence and the PBOC announcement. A pullback to the 0.7360 – 0.7400 level can offer a good short opportunity for the pair.

Current Market Sentiment:

Yesterday’s NY session was extremely light, which is common for a Monday. The calendar was comprised of two FOMC members speeches, neither of which had any meaningful impact on price action. Asia however was a very different story.

During the Asian session National Australia Bank’s survey showed business confidence slumped after two months of good sentiment, however the dominating event for the session came when the PBOC announced a devaluation of the tightly controlled yuan and changed fixing arrangements sending an immediate ripple effect through the currency markets. The dollar rose as high as 6.3606 Chinese yuan from it’s close 6.2136 late Monday, it’s largest one day move ever. Regional currencies slumped while the hardest hit majors have been the antipodeans as the AUD and NZD both saw sharp declines. The USD and JPY have reaped the benefits of safe haven flows as they continue to strengthen after the PBOC announcement.

Coming up, the London session is once again fairly light with only German ZEW Economic Sentiment (more about this event here) on tap, however we still expect to see the impact of the PBOC announcement as European and US traders enter the market.

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