AUD/USD: Buy-Side Microflows Within Gloomy Macro Outlook

In the early hours of the last US session, buy-side interest in the Aussie started to increase as microflows reverted back into the likes of beta currencies as the upward slopes in the 25-HMA (a proxy for microflows) via the DXY (inverted) / Yuan coupled with the Aus-US yield spread exhibit. Support the upside was the structural shift in the SP500, as both micro and macro flows re-align to bullish. However, as followers of my market coverage know well, the Aussie has been mainly driven by the yield spreads (blue line) and the DXY/Yuan performance (red), that’s why the macro slope (125-HMA) still cast a major shadow for those long-side committed. Such dynamics suggest that the upside should find macro interest at key liquidity intersections such as 0.7120–25 or 0.7145–55. It remains to be seen whether or not the short-term positive flows can overwhelm the macro picture. For now, more work must be done for the macro slopes to also transition into a long bias. That’s why in today’s chart you still see a red box (macro outlook)