AUDUSD Boxed In Awaiting Fresh Catalysts

Based on intermarket analysis, the Aussie remains underpinned by a higher yuan/Aus-US yield spread, while most of the pressure keeps emanating from the sell-off in equities (Hang Seng the most correlated instrument). The reluctance of the Aussie to trade sub 7160–70 harbingers that the downside should remain limited until the FOMC meeting. The same story applies to the upside, with constant failures to trade above 7200 suggesting that the 30–40 pips range may cover all the eventualities until vol kicks in. Exercise patience until the range breaks out.