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Aussie Reached Initial Target – Resting Before Next Move

AUD/USD continues it’s march upwards, breaking the 0.68 resistance line. It rose on the wave of massive dollar selling that began with the shocking FOMC statement yesterday. The next resistance line is much stronger for the Aussie.

AUD/USD was trading in a narrowing channel for a very long time. Downtrend resistance and uptrend support were closing on each other. Exactly one week ago, AUD/USD  took the upwards path, as expected.

After last night’s shocking FOMC statement, the dollar fell across the board. Printing all these dollars and spilling them into the market devalued the dollar very quickly. The Euro saw the strongest gains, about 600 pips in less than 24 hours.

And also in the land down under, thongere were significant gains. After breaking the downtrend resistance last week, the Aussie was drifting around 0.66. The FOMC statement sent it rapidly above the 0.68 point, a significant resistance line. This was the high point in February 9th.

AUD/USD rested for a short while above this point. At around 11:30 GMT today, the move upwards continued. AUD/USD now trades at 0.6931, leaving only dust behind.

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.

Gold: The price of gold is also notable in this context: Gold trades now at $955 per ounce, while yesterday it traded as low as $888. Gold Prices and the Australian dollar go well together.

So, as we approach Friday’s “Triple Witching Hour”, this pair can take two directions: strive forward to the psychological level of 0.70 on the way to the major resistance at 0.7265, or retract and rest above 0.68.

I have a tendency towards this pair, since it usually “play by the rules”. The outlook for Friday will be published later on.

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.