25 Mar 2014
AUD/USD full of hot air?
FXStreet (Guatemala) - AUD/USD is trading at it’s highest level since the pair pulled back some points on the board over November and December 2013 after falling from the 0.96 handle.
AUD/USD was last trading at these levels in December at a high of 0.9163. Currently the pair trades 0.9175 the high, but is the pair just simply full of hot air?
AUD/USD under scrutiny
Jane Foley, Senior Currency Strategist at Rabobank, explained that the AUD/USD is currently providing enough interesting signals to fascinate an army of technical analysts. She said, “Not only does the 0.9140 area mark the humble 200 day sma, but it also represents the neckline in a head and shoulders formation”. Also, she noted that this level coincides with trendline resistance; a close for the week above the 0.9140 level would confirm a breach of this on the weekly charts. “A rising wedge pattern is also observable. This is a bearish signal pointing to downside risk. The latter is consistent with signs that momentum is fading. In short the technicals suggest that AUD/USD could still go both ways from here”. However, she went onto say, “Medium-term, downside growth risk from China and from low investment levels suggest that AUD/USD is still likely to push lower. We maintain a 12 mth forecast of AUD/USD 0.86”.
AUD/USD Levels
The 20 DMA is 0.9023, the 50 DMA is 0.8945 and the 200 DMA is 0.9139. RSI (14) reads 67.60. Supports are ascending from 0.8990, 0.9025, 0.9048 and 0.9085. Spot is 0.9172 while resistance after the session high at 0.9175 are 0.9204, 0.9260 and 0.9278.
AUD/USD was last trading at these levels in December at a high of 0.9163. Currently the pair trades 0.9175 the high, but is the pair just simply full of hot air?
AUD/USD under scrutiny
Jane Foley, Senior Currency Strategist at Rabobank, explained that the AUD/USD is currently providing enough interesting signals to fascinate an army of technical analysts. She said, “Not only does the 0.9140 area mark the humble 200 day sma, but it also represents the neckline in a head and shoulders formation”. Also, she noted that this level coincides with trendline resistance; a close for the week above the 0.9140 level would confirm a breach of this on the weekly charts. “A rising wedge pattern is also observable. This is a bearish signal pointing to downside risk. The latter is consistent with signs that momentum is fading. In short the technicals suggest that AUD/USD could still go both ways from here”. However, she went onto say, “Medium-term, downside growth risk from China and from low investment levels suggest that AUD/USD is still likely to push lower. We maintain a 12 mth forecast of AUD/USD 0.86”.
AUD/USD Levels
The 20 DMA is 0.9023, the 50 DMA is 0.8945 and the 200 DMA is 0.9139. RSI (14) reads 67.60. Supports are ascending from 0.8990, 0.9025, 0.9048 and 0.9085. Spot is 0.9172 while resistance after the session high at 0.9175 are 0.9204, 0.9260 and 0.9278.