Direction
interesting move in AUD / USD saw today. Price was bullish on Monday when meeting open, but the bullish momentum was defeated at the first request to the soft resistance 0.897 finally held despite management bulls to climb above briefly. Even the extra push to enter the ascending channel (see below) did not help the bulls consolidate their high position, and instead of falling to 0.895 actually helps affirm the breakout of the channel inversion previously bullish bias in one current bearish.
timetable
to be fair, the bulls have had a difficult task to remove whereas weaker PMI HSBC China service numbers were released during the key moment where resistance has been tested 0.897. Therefore, we should not automatically assume that the current support 0,895 break easily, like a rebound to 0.897 can be possible again. Stochastic readings agree with the curve flattening Stoch already. The readings are not on the oversold territory, but a depression is still possible considering that the previous trough were seen around the same levels.
However, if 0895 breaks, the next important level is 0.884, but expect 0.89 round number to set up a reasonable fight especially as the volume of transactions remains on the low side and directional tracking is should not be far away.
Daily chart
Daily Graphic echoed through bearishness seen on daily chart. Stochastic readings have recently formed a peak in conjunction with the bearish rejection of the round figure of resistance 0.0. This opens a Top channel pass or 0.882 least that is the lowest of the consolidation of December -. And potentially the confluence with the Top channel if the price is improbable and highly cut down by
Fundamentals not changed all that, with AUD / USD remain assigned to head lower in 2014 given the strength dollar continues and weak Australian economic growth. However, expect strong buying interest should carry traders AUD / USD drops too low, which will continue to support AUD / USD and prevent prices from sliding too fast. A more likely price action would be the observed decline in mid-October when the price went lower in measured steps. Again, since US10Y breached the 3.0% level, there is a chance that interest rates will go higher from here. As it is, a 3% return is already much more attractive than the interest given transport taking AUD / USD, and the holding of 10Y Treasury does not expose you to currency risk, and will certainly decrease the interest postponement. Therefore, there is a chance that bear interest can not be as high as we think and traders trying to fade declines carry traders hoping to support the rebound may end up being wrong more often than right.
Links:
EUR / USD Technical - Triple Top formed Waiting for confirmation
Gold Technicals - Internal Trade S / T uptrend channel
GBP / USD - Pound drops start in 2014
This article is only for general information purposes. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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