By: Mike Kulej
The bull market in the Australian Dollar seems to be without end. Massive rallies in most of its pairs, some making all time highs (yet again), with the AUD-USD getting the most attention. And for a good reason, too – the price has reached levels almost unimaginable just few months ago.
After testing the parity for a few months last year, the AUD-USD has broken decisively about that level. It has paused briefly at about 1.0500, before resuming the climb to the current 1.0900. At this point, the important 1.1000 level seems very likely to be reached soon.
Since we the price is at all time high, it is very difficult to “project” the extent of this move. There are no old resistance/support levels, which could offer potential objectives. In such cases, round numbers, like the 1.1000 in case of the AUD-USD, can become a “psychological” reaction level.
Right now we have no indication that this rally is about to end. However, the uptrend seems overextended – the trendline is extremely steep, while the technical indicators show overbought readings. General conditions are right for a consolidation/pull back in the AUD-USD and that could happen around 1.1000.