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Catching a Falling Financial Knife

What The Rising Australian Stock Market Could Mean For The AUD/USD

Stock-Markets / Austrailia Apr 30, 2013 - 12:48 PM GMT

By: ForexPros

Stock-Markets

Decided to look at the Australian stock market today: there's a pretty strong impulsive rally that should move even higher, as we need five waves from early April low. Are you 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 the AUD/USD below resistance.


On the other hand, investors will start to sell their shares for Australian dollars which will most likely increase its value. So while Australian stocks are higher, the AUD/USD could go even lower if we consider the negative correlation between the markets as shown on the overlay chart below.

ASXSP200 Daily

Australian stocks vs. AUDUSD

Analysis by: http://www.Forexpros.com - Written by Gregor Horvat Forexpros

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Catching a Falling Financial Knife