AUDUSD Rips into Well Defined Resistance
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Despite being out of the office for nearly 3 weeks, I’ve stayed on top of AUDUSD and EURAUD developments (as much as one can when surrounded by the natural beauty of Hawaii). The lagging nature of the AUDUSD (new highs in stocks but not in AUD) is reminiscent of the previous topping process in ‘risk’ from earlier this year (March).
Last week’s AUDUSD surge has so far stalled at the 20 day average / 50% retracement of the 10613-10166 decline (10390). If we are headed lower then we probably do so from no higher than 10450 as per daily RSI (50 is now resistance). It’s interesting to note that if Friday’s high remains in place, then the decline from 10613 would consist of 2 equal legs at 9954, which is in line with the 6/25 low and 61.8% retracement of the rally from the 6/1 low.
The EURAUD is nearly 800 pips off of its low and moving up stops (currently 12200) on existing longs remains the best strategy. Weakness below 12200 would shift focus to 12070 and 1990.
AUDUSD – Daily Bars
Prepared by Jamie Saettele, CMT
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Jamie is the author of Sentiment in the Forex Market.
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