By: Colin Jessup
Today's daily candle chart for the Aussie formed a strong bullish engulfing candle closing above the former resistance zone at 1.569.This level is now strong support and to break this level could mean prices will fall. However, we have also closed above the daily moving average and todays price action also engulfed the 61.8% retracement level of the last 4 days worth of bearish action. Combining these points with the fact that the RBA has left the interest unchanged at 4.75% and the economy is under a little less pressure, I can see the pacific peso climbing higher.
Look for resistance to the upside around 1.0750 and if price breaks above 1.0775 I am confident we will see 1.0850 or higher. Should price fall below 1.0441, which is currently a strong daily support zone, we can expect to see 1.0300 not long after. I would be surprised if price broke through 1.0300 easily as we have a long standing ascending trend-line at this level as well.
Happy Trading!
