AUD/USD Resistance by Downtrend Line

18 April 2012 12:12:00 PM

By: Bastian Rubben

The reports of YAHOO and Goldman Sachs lifted the US stock markets yesterday and the indices rose 1.6%. The results season causes extreme changes in the stock markets, which have a direct impact on the US dollar. However, I would not be surprised to see the stocks around the weekly low by the end of the week, though technically it looks like the bearish correction is over.

As stated, the USD keeps changing its trend against the major currencies, according to the directional changes in the stock markets. The American dollar reached a supporting level versus the Australian dollar, and this is actually a resisting level for the pair AUD/USD. The resistance is the higher boundary of the downtrend channel that the pair has been moving through for several weeks and a break-up of this channel might take the Aussie above 1.05. However, if the current pattern remains, the pair should slide to the lower boundary of the channel, around 1.02.

AUD/USD Daily 41812

The Australian dollar was strengthening against the Euro as well, despite the fact that the Euro made a strong short-squeeze against the USD. The pair EUR/AUD made the descending triangle pattern, which indicates for the pressure of the sellers on the pair, as a strong break-down of the support at 1.26 might pull the pair down to 1.24. Pay attention to stochastic low levels, which indicates for overselling and this means that the pair might rise towards 1.27 or above.

EUR/AUD Daily 41812

Bastian Rubben is a Chief Analyst at SunbirdFX who specializes in reversal systems. Bastian’s primary trading strategy is to reduce each trade’s risks by trying to profit when everybody goes in. He uses Stochastics, 20 & 50 EMA and 200 SMA to craft his Forex technical analysis.

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