AUD/USD Signal- Oct. 21, 2013
By: John Ursus
Timeframe: W1 Recommendation: Short Position
Entry Zone: 0.9700 – 0.9725
Take Profit Zone: 0.9300 – 0.9325
Stop Loss Zone: 0.9875 – 0.9900
The AUDUSD has rallied sharply as visible in this W1 chart. The rally was fueled by the perception that the Reserve Bank of Australia has completed all its rate cuts and that the next move could be an increase in interest rates. This has acted as a bullish force for the Australian Dollar. On top of that the US Dollar has continued to sell-off as investors believe quantitative easing will remain in place longer than anticipated.
The AUDUSD has now approached a twin resistance zone which is comprised of its Fibonacci Retracement level as well as horizontal resistance zone. Traders should expect a pullback in this currency pair back down to solid support levels before the next move higher which should lead to a breakout above parity. The overall long-term bullish trend remains intact.
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