AUDUSD could afford some consolidation after the recent run to below 1.0200, but the huge consolidation is giving bears fits. Let’s have a look at the next technical resistance levels.
It would have been nice for AUDUSD to cooperate and stay below the handy 200-day moving average around 1.0318, but alas, the ECB’s latest efforts, Chinese stimulus announcements, and the possibly prospects of either QE3 or strong data out of the US are administering a case of whiplash to the markets and have driven a very steep rally in AUD crosses. Despite the break of the 200-day moving average, there are a few more layers of resistance in place – after all, we came off a 1.06+ high in August.
Chart: AUDUSD
Yes, the 200-day moving average has fallen again, but the 55-day moving average and the 0.382 Fibo area coincide here in the 1.0335-40 area and above that we have the old head and shoulders neckline coming in below 1.0400 now and then the 0.618 Fibo up at about 1.0440. Not a lot of precision, but the bearish case hasn’t been neutralized completely unless the pair works back above 1.0440. Let’s see if we see a bearish reversal pattern that can give the bears hope some time next week if we don’t see a reversal signal on today’s US employment report.
John J Hardy,
SAXO BANK