Trade Of The Day AUDUSD – Grinding higher to pivotal resistance hurdle
Fundamental: AUD rallied to multi-week highs against the USD partly because of the demand for carry trades. Reserve Bank of Australia (RBA) Governor Glenn Stevens spoke in this morning that past booms had ended with galloping inflation, severe monetary tightening and eventual bust. He made no mention of monetary policy but to note that the RBA left rates unchanged at two percent yesterday.
Technical: While .7170/50 remains the bid zone expect grind higher to test .7350 area next, only a close below .7150 concerns near term bullish bias.
- If you follow my weekly Commodities Corner report you will know I am currently long AUDUSD from .7070, I am holding that position for a grind higher to test the late .74’s.
- You can see from the chart below that .7480/.7500 area has confluent resistance factors; equality corrective target AB=CD, the 50% fib retracement level of the last major swing south, equidistant swing with the last corrective cycle and these levels coincide with previous structure lows.
- I will be looking to reverse my AUDUSD long position into the highlighted area on the chart, watching for intraday reversal patterns to develop to venture short against .7500