Can it take the next step?
The Aussie dollar has performed well against the greenback since early February and while it appeared to have lost some momentum recently, it may have rediscovered that today.
The pair ran into resistance around the late-October highs last week and has been in consolidation since but as you can see today, it’s spiked higher and the MACD and stochastic on the 4-hour chart suggest there’s some momentum behind the move.
The fact that we never saw much of a pullback from those highs may suggest the mood is particularly bullish around the pair, something that may become evident if we do see a significant break above 0.7550.
If we do see that breakout, the next major area of resistance could be around 0.78, although there will be significant tests prior to that.
For example, we could see momentum slip around 0.76 again, which has proven a notable area of support and resistance in the past, as has 0.77 which was the mid-point of the range the pair traded in for most of the first half of last year.
If the pair fails to build on today’s momentum, it could trigger further profit-taking, at which point 0.73 and 0.74 could become very interesting with the former marking the low of the 200/233-day SMA band it broke above a few weeks ago.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Craig Erlam
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