Forex Technical Update
The AUD/USD showed a strong rally on 3/16 breaking above a declining trendline, signaling a bullish reversal to the March bull-run. To start the 3/18 trading week, the market pushed to another high but stalled after touching 1.0635. There was a bullish engulfing candle immediately formed after the RBA minutes came out at 8:30 PM EDT. The minutes revealed positive outlook, or rather a softening of negative outlook. However, this bullish candle was followed by an outside bearish bar (higher high, lower low), and the momentum is still subdued. The 1H RSI reading failed to come back above 60. (If it is stuck between 60 and 40, it reflects a consolidating momentum).
If there is a correction in the Asian session and break rising trendlines shown in the 1H chart, an important level to monitor in the upcoming 3/20 European session will be the 1.0550 level. This is a confluence of a previous resistance/support pivot, the 200-hour simple moving average, and 38.2%tracement of the 1.0421-1.0646 bull run. A break below this level might shelve the bullish outlook. Then a break below 1.05 (also a break below 61.8% retracement and previous support level) would suggest a bearish outlook back toward 1.0420, and the 1.04 handle.
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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.