AUD/USD rose for most of the session on Wednesday, but pulled back to form a shooting star. The fact that this happened at the 1.08 level is very interesting as it was seen as a barrier of sorts by the markets in general. Being as the Aussie is a currency that traders will buy in a risk positive environment, this isn't a mistake in our opinion.
The pair is like all others in the fact that it will be influenced just as much by things going on in Athens than things going on in Washington or Sydney. The fact that the market couldn't settle above the handle and formed a shooting star suggests that we will see a pullback at the least, and a selloff could be coming in short order. If the Europeans don't get a move on - this could happen right away.
The Aussies are still buoyed by the Chinese and their expansion demanding more and more Australian commodities, but if the European Union falls in to a massive recession, this will certainly slow down the Chinese expansion as well. In turn - this comes to Australia. As long as the EU holds together though - this pair should have an overall bullish bias.
None the less, a pullback would be welcomed. The real test is if we get down to the 1.04 level, and fight it out down there. This level has to hold in order to keep the bullish bias in this pair. If it were to give way - we could see a massive rout. However, this is far below the current price, and we think the markets will continue to rise after any pullback. The pair looks to have support at the 1.06, 1.05, and the obvious 1.04 levels.
We are currently waiting for a pullback, as the market looks overbought. We were willing to buy on a daily close that cleared the 1.08 level if we had to, but it looks like we will be able to get a better price if we let the market fall a bit. A daily close above the top of the shooting star has us buying - even if it is toppy looking.
AUD/USD Forecast February 9, 2012, Technical Analysis
AUD/USD Pivot Points (Time Frame: 1 Day)
Name S3 S2 S1 Pivot R1 R2 R3