Technical Analysis of AUD/USD
AUD/USD has been enjoying some good strength over the last several months as cheap money is flowing into the markets. With the Fed keeping rates exceptionally low until 2014, the Bank of Japan expanding its bond buying programs, the Europeans throwing more money in the system and the Bank of England buying bonds as well, commodity currencies continue to attract the attention. From a technical point of view, all indicators stay bullish for the Aussie. After breaking above key resistance level at 1.0699, October’s high, the pair is currently trading at 1.0802. Since mid-December the pair has been trading firmly above the 89 SMA, with the 20 EMA holding comfortably above the 50 EMA on the hourly and daily chart. Considering that the RSI remains bullish on all timeframes and the US Dollar Index is still trading in a downward channel since mid-January, we could see the AUD/USD making fresh 2012 highs. Next resistance level for the bulls to watch is at 1.1027, June highs. There are no sings at the moment that the Aussie is going to lose favour anytime soon, but it should be noted that Australia could at some point be compelled to protect its currency either by following the example of Switzerland or through a quantitative easing round. That scenario could open the door for the AUD/USD to fall back to 0.6000 – 0.7000 levels.
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