In my earlier blog titled "It's my turn, said EUR" (23 Feb 2012), I mentioned of EUR having a multi-week outperformance against most majors. That was the very subtle start of risk aversion where negative carry pair like the EURAUD was moving higher from the low of 1.2133 to top off at 1.3030. However, just a couple of weeks back while I was holidaying in Sydney, signals suggest the move may have ended. (trust me, I did not spend that much to turn the AUD!!)
So what does that imply? In short, we may move back into a risk loving environment in the weeks ahead with AUD starting to stay firmer again. Do note that I have not seen similar reversal signals in the xxxJPY crosses yet, so I will be mentally prepared for another round of JPY strength.
Based on the technicals, the easy money from the USD rally has probably come to its tail end with AUD$ price action showing stronger bullish divergence as compared to EUR$'s milder signal. In my last blog "Uncertainties, uncertainties & more.....", I warned of a sharp sell-off followed by a sharp reversal, all happened during the full moon zone which ended yesterday.
There should be sufficient information here to get anyone out of trouble for now while I recuperate. Therefore, no specific levels for now. Will update if anything.
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