AUDUSD: Aud rallies strongly ahead of FOMC by FX Charts Daily

AUD/USD: 0.8017
The Aud has been busy cleaning out the shorts today, including me, who has been horribly wrong, not having seen a move of this magnitude at all.The sharp rise in the Iron Ore price and the diminishing expectations of an RBA May rate cut has helped the push higher, but it does seem overwhelmingly driven by stop losses in market that has been caught very short of Aud.

Having now taken out the major resistances ahead of 0.8000, the Aud has  reached 0.8024 where it has formed a double top with the 28 Jan high. Above this, the next level to watch is at 0.8034, the low seen on 5 Jan, and the Fibo resistance at 0.8048 (38.2% of 0.8910/0.7532). A break of this level would seem pivotal, as back above here would suggest a run back towards 0.8100 and possibly higher, and would put the longer term downtrend into question.

The downside support will see bids, below 0.8000, at 0.7970 and 0.7950 (both minor), ahead of the Fibo support at 0.7912 (23.6% of 0.7552/0.8024).

The short term charts are overbought and we could see a minor correction lower, but the dailies still look very positive so it seems that the downside is limited and that buying dips remains the gameplan, with the FOMC Statement to provide the main direction.



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