From the beginning of the week the AUD/USD pair is showing
string upward momentum and today marked daily high at 0.7739, which is few
pips below the yearly high posted om March 21st.
This movement is of course well supported by sure fundamentals as the consumer
inflation expectations for July are well increasing and meanwhile the Chinese
trade surplus showed better that expected numbers.
Technical indicators on the four-hour time frame are confirming the short term
bullish outlook. The price is developing above its 20-day SMA while the 100-day
and 200-day SMAs are staying flat and are acting as dynamic supports around
0.7500 – 0.7535 area. Stochastic has turned sharply to north and RSI is nearing
overbought territory. As both indicators are displaying strong upward momentum,
some exhaustion is not excluded that could lead to slight correction.
However the rally might be extended towards 0.7835 – the last year’s high, with
some risk to keep in mind in case of abrupt retracement due to profit taking.
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