By Rita Ruvinski – The AUD/USD made a sharp fall after the Chinese central bank announced a rate hike. Despite the Australian positive data released earlier, the news from China had a negative impact on the pair. Although the pair is now supported in its lower levels, our technical analysis shows it could be just a temporary retracement and AUD/USD parity is sure in sight.
After the pair fell from around 0.9900 to around 0.9650 on the Chinese move, it now bounced back above 0.9700. This line, 0.9650, served as a resistance line when the Aussie was climbing higher, and now worked as strong support after other lines collapsed.
We will be looking at the daily chart for AUD/USD. The technical indicators being used are the Bollinger Bands, MACD and Relative Strength Index (RSI).
- The RSI, while not quite in the oversold region yet, is pointing downward and is approaching the lower support line. Should the indicator move below the 30 level, traders can take this as a sign that the pair may see a bullish correction.
- The MACD is positive and above its signal line. The configuration is bullish.
- The Bollinger Bands are tightening which confirms the bullish volatility in the pair.
- Although the upward potential is likely to be limited by the resistance at 0.9800 once the pair breaches, its traders can expect a further upside with 0.9840 and 0.9915 in sight.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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