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AUD/USD is set to experience a sharper correction lower if the pair fails to surpass the 0.7740/50 area – which is currently tacking. The slide in Iron Ore triggered by Chinese policymakers also warrants some caution, as reported by ING.

Iron Ore slump suggests caution

“After surging 10% on Monday, Iron Ore is now falling 10% today. Driving this move seems to be the intervention of Chinese policymakers, wary that a surge in commodity prices could undermine the recovery. Here, officials have raised margins and imposed fees on steel trading and made it clear that speculators will be frowned upon.”

“The synchronised recovery in global demand suggests the rally in commodities is an enduring one. But for the short-term, corrective forces are at play – which could take its toll on the AUD – a key exporter of iron ore.”

“Failure of AUD/USD to regain the 0.7740/50 area today, warns of some potentially sharper corrective losses under 0.7675/85.”

 

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