Hung Australian Parliament Raises Questions About Forex Sentiment

The weekend news of a hung Australian Parliament, after general election votes showed no clear winner on Friday, leaves the market with an initial fundamental challenge to overcome, on a week that is relatively light on planned macro-economic releases. The high correlation between AUD and the S&P 500 may be tested at the open of trade, as speculative interest monitors the tests of upside resistance at 1075 on the S&P, and compares that to the 200-day SMA resistance on Aud/Usd at 0.8950. A failure of both asset classes to break higher could instigate a solid test of 0.8830 and then maybe a visit to the July low around 0.8550 on Aud/Usd. As traders witnessed with the value of Gbp after the U.K. election failed to produce a clear-cut winner, the market does not tend to get too bullish on currencies that are backed with political question marks.A sell-resistance outlook may be the best approach in the near-term.
Disclosure: None About the author: The LFB

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