AUD/USD: can the rally sustain itself on 0.70 handle?

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Guatemala) - Yesterday's double top reversal made a good 60 pip TP trade before bears were squeezed out overnight on a risk-on US rally. AUD/USD is currently trading with a high of and a low of in early Asia after risk-on markets allowed for the Aussie to finally advance through the 200 sma with conviction on the hourly chart; a significant move.

    The move was significant because AUD/USD has not traded through that sma since the start of this year and the huge decline that kicked off 2016 during the Chinese crisis and stocks rout. The markets today were mixed, with the ECB as the main attraction, lifting equity market's spirits, but all things related to risk made a real comeback in the US session.

    WTI went through $30, copper shot up, stocks closed in the green and we are set up for more of the same today when Tokyo opens, as well as China so long as Chinese vice-president Li's promises are kept that they will keep intervening in stock market to stabilize it, all of which underpin the Aussies recovery on the 0.70 handle.

    AUD/USD levels

    Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, a double bottom around 0.6825 has been confirmed, given that the price is now above the neckline of the figure at 0.6960, now a key support. "In the same chart, the 20 SMA is turning higher well below the current price, while the Momentum indicator holds above its 100 level, and the RSI indicator heads north around 61, supporting a continued advance, on renewed strength above the 0.7000 figure."
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