AUD/USD continues to rally – facing key short term resistance

The relative performance of the AUDUSD in the last few sessions has been quite impressive. As anyone who deals in the Australian equity markets would have seen we are being led by markets other than the US – in this case China. In fact it has almost felt in the couple of days that you should buy during the Asian session and sell into the European and US. It seems the Asian timezone has a lock on optimism at the moment. The AUD has been holding on and creeping slowly upwards but in the overnight sessions there have been some signs of key resistance creeping in as you can see in the chart below:

For the more mid-term trader 1.0150 remains the key level but for those dealing on the hourly chart these is something more pressing. You can see that prices are starting to make higher troughs but note the rate reaching the 200 period moving average and being quickly repelled – I’m sure the candlestick fans will want to take a look at that.

As you can see the 50 period moving average is headed higher whilst the 200 remains on a downward trajectory. During the next 24 hours we will likely see prices get squeezed between the 2. I think that a downward breakout is quite a minor signal due to the other support levels not far below but a push above the 200 will be of more interest.  The AUD has met with resistance previously around 1.0270 so a push through the 200 and this level would see it in open water.

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