The currency halted its surge against the U.S. dollar to avoid violating the sacred geometry of a price chart drawn by institutional traders.
The Australian dollar’s recent surge against the U.S. dollar came to an abrupt halt on Tuesday, stopping just short of a completely arbitrary price point that several major investment banks had previously circled in red ink on their monitors.
The global currency market, which moves $7.5 trillion daily based on the collective hallucinations of institutional traders, saw the Aussie dollar pull back as it approached the $0.6650 mark. Strategists across Wall Street had spent the weekend warning clients that this specific fraction of a cent represented a "key resistance level." By aggressively publishing this prediction, they successfully ensured that everyone would dutifully sell the currency the moment it got close to the invisible ceiling they had just invented.
Despite steady commodity exports and clear macroeconomic signals from Federal Reserve Chair Jerome Powell, the currency's momentum was instantly vaporized by the sheer superstitious dread of crossing a line drawn on a trading terminal.
We drew a thick horizontal line on our price charts last Thursday, and if the currency actually goes above it, we have to admit to our clients that we have absolutely no idea what drives global capital flows.
Meanwhile, the Japanese yen consolidated against other Asian currencies in early Tokyo trading. Market observers noted that "consolidation" is the industry term for Japanese bankers returning from their extended Golden Week holidays, opening their terminals, and spending the first three hours of the morning deleting emails rather than taking massive directional bets on the global economy. Trading volumes remained thin as the Bank of Japan allowed its staff time to catch up on missed calendar invites before resuming their daily interventions to prop up the embattled currency.
Officials at the Reserve Bank of Australia, who set actual monetary policy affecting 26 million citizens, declined to comment on their currency's trajectory. The central bank has reportedly long ago accepted that their nation's purchasing power is entirely subordinate to whether a 28-year-old BlackRock analyst thinks a moving average looks a little too steep.
At press time, traders were preparing to buy the Australian dollar back once it hits "key support"—a different, equally fictitious floor price determined by looking at where the line bounced three weeks ago.