Today decided to look at the Australian stock
market where we can see a pretty strong impulsive rally that should move even
higher as we need five waves from early April low. Maybe you are wondering how
this will impact the AUDUSD?! We suspect that if investors will keep their
money in shares; which is expected based on the price action, then there will
be no demand for cash (AUD) which may keep AUDUSD below resistance. On the
other-hand, only if investors will start to sell their shares then they would
exchange them for Australian dollars which will most-likely increase its value.
So for now when Australian stocks are higher the AUDUSD could go even lower if
we consider the negative correlation between the markets as shown on the
overlay chart below.
ASXSP200 4h
Australian
stocks vs. AUDUSD
