Time to pick a top in the Australian Dollar? – BBH

By FXStreet Research Team at BBH, suggests looking for a top in the Australian dollar.

Key Quotes

“The low for the year was set in mid-January (~$0.6830), before the other markets turned. The MSCI emerging market equity index bottomed on January 21.

Between the mid-January low for the Australian dollar to the end of March, when it recorded its high (~$0.7725), the Australian dollar rallied 11.5%. Its rally coincided with a number of economic considerations, including the broad recovery in commodities, shifting expectations of Fed policy, negative interest rates in Japan, and more negative interest rates in Europe, and about a 25 bp rise in Australian bill rates, as expectations of a Q1 cut by the RBA faded.

The Australian dollar’s rally began before other markets, and it should not be unexpected that it peaks first. The technical condition of the Australian dollar is deteriorating. First, met the 61.8% retracement objective of the slide since last May (that began near $0.8165). That retracement was found by $0.7650. Second, there are bearish divergences with the RSI and MACDS. There technical indicators did not confirm the new high the Aussie set at …read more

Source:: FX Street