AUD/USD: Spikes higher as stops above 0.7730 tripped

AUD/USD has found heavy buying interest at the London open, rising from sub 0.77 levels all the way towards 0.7742, gunning through stops above 0.7725/30 in the process, with more being reported at 0.7750 and 0.7760.

AUD buyers take out topside stops

The rise in the Aussie follows a grab of liquidity below 0.77, before intrinsic values for the Aussie started to move aggressively north to support AUD buys. The VX declining, coupled with the DXY index selling-off and copper prices recovering off lows, has allowed buyers of the high-yielding currency to gain traction, and with the smell of stops above 0.7730, one would think it was inevitable to hunt these positions as the area represented a nice pay-check liquidity following the consecutive rejections off the level this week.

AUD/USD technicals

The London rally, which has extended just short of 50 pips, looks now quite overstretched, with 0.7745/50, last Friday's POC (point of control) a critical support, ahead of 0.7760, where more stops by prime brokerages have been reported, according to market sources. On the downside, any pullback, given the strong bullish momentum, should fin initial area of buying interest circa 0.7730 (old resistance turned support) ahead of 0.7715 (POC this week), followed by 0.77 round number.