Forex Technical Update
The AUD/USD continued to rally past the 200-hour simple moving average as well as a declining channel resistance near 1.0350 after Bernanke's speech yesterday. There was not much new to go on, but market chatter explains the USD-weakness by noting Bernanke is still open to using monetary stimulus measures to help stimulate the economy.
Price action seen in the 1H chart shows a rising channel breaking above the declining channel resistance. The 1H RSI tagged 70 and established short-term bullish momentum. If the market can stay above the 1.0350 pivot now, we can say bulls are in charge. Otherwise, the market could be ranging.
The current resistance pivot is 1.0390. Failure to break below 1.0350, and ability to break above 1.04 should confirm the breakout to the upside. In the short-term, there are resistance pivots at 1.4916, but the 1.0450-1.0464 area is the important resistance zone representing the high of the broken channel. Above that 1.0550/1.0555 will be the next resistance pivot area as seen in the daily chart.
If the market breaks below 1.0350, it will be unclear, but a break below 1.03 should open up the 1.0225-1.0240 lows. This would be in the context of a sideways market that started at the beginning of April.
Fan Yang CMT is a trader, analyst, educator and Chief Technical Strategist for FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
Information and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.