Technical Analysis of AUD/USD
The AUD/USD has been in a strong uptrend since January 2009 but has been unable to extend gains lately despite a healthy appetite for risk. Considering that the aussie has served as a proxy for risk in recent years the current price action could be a warning of a near-term pullback in the market. Despite the fairly positive RBA minutes overnight, the bears are dragging the pair down in early trading following a disappointing performance in Chinese equities amid ongoing worries that demand from China is likely to flatten out. Should global recession materialize in China, this could weigh heavily on Australia. From a technical point, the market seems set to test a major trend line of support starting from December 2008. With the MACD signal line flipping below zero, a bearish line capping RSI and the bearish alignment of moving averages on the daily chart, the bears seem to have taken full control of the market. The picture remains bearish on the hourly chart too, with the market crossing below the 89 SMA, not seen since March 15th, and the 20 EMA crossing below the 50EMA favouring long positions with target the 1.015 level. In the alternative scenario, an uptrend movement above 1.08 could open the way for 1.1035
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