AUD: AUD/USD Firm at Highs, But Bounce Deemed Corrective at These Levels
Last updated at:Mar-06 16:45By: Edward Hardy
- AUD/USD remains firm in the bounce off yesterday's pullback low of 0.6478, and is rebuffing the bearish outlook that should hold below key S/T resistance at 0.6595, the Feb 22 high. Below here, strength is considered corrective - keeping focus on 0.6443. A breach of this level would confirm a resumption of the downtrend and open 0.6412.
- Momentum-based technical trading strategies have proved profitable in AUD/USD so far this year - an RSI-based strategy (long when RSI crosses above 30 from below, short when crossing 70 from above) continues to signal a winning short-position in AUD/USD off the late December high.
- Much of the AUD strength stems from the China NPC growth targets suggesting scope for both fiscal and monetary easing in China - disappointment with which could prompt an AUD reversal and re-orient focus on the downside. Sizeable AUD options are set to roll-off at Thursday's NY cut between $0.6520-25, with A$1.1bln notional seen expiring.