AUD/USD encountered short term resistance on the psychological 0.70 level, but with the help of Philip Lowe, RBA assistant governor, it now trades above this level, looking up to major resistance.
AUD/USD, one of my favorite currency pairs, began the forex trading week with a weekend gap of about 60 pips. During the Asian and European trading sessions of Monday, the Aussie flirted with the 0.70 line.
The 0.70 line isn’t a technical resistance line, but rather pshcological. This round number made a hard time for the Aussie. It touched it, but didn’t break.
It was only when Philip Lowe, RBA assistant governor began talking, the AUD/USD broke this line. He stated that “the reforms of ATM fees, which came into affect on March 3, have increased competition and benefited consumers.”
Although this isn’t a forex oriented comment, the Aussie began moving, broke the 0.70 line and almost reached 0.71. It has retracted since then, but never went under 0.70. AUD/USD stands at 0.7043.
So, after the Aussie reached the initial target of 0.68, it took a rest. After it consolidated, the new week provides new momentum. All in all, since the AUD/USD broke upwards, the trend continues very nicely.
The next resistance line is major – 0.7265. The Aussie touched this point in two consecutive days at the beginning of January and fell back. This was a major retraction after the pair fell dramatically on one day in October.It then fell from 0.76 to the lows of 0.70 in one day, before retracting and continuing the downfall.
I doubt that this major resistance will be broken this week, but with the wild market conditions, and the nature of forex trading, anything can happen.
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