The Australian Dollar has not been the only domestic market to benefit from the recent USD weakness, as Copper, Iron Ore, Gold, and Silver all follow suit to support the local currency breaking to new highs.
Of course we are also seeing Euro, NZD and GBP higher but the focus for this post is on Aussie related markets.
Whilst my Twitter feed explodes with bulish sentiment we also need to be aware that global indices are reaching potential resistance areas so be on guard for a loss of momentum and try nt be be the one going long at the top.
The break above 0.7282 confirms a Double Botom pattern which projects a target around 77c. Only a few weeks ago this seemed imposible for many to beleive as we teetered on the edge of 69c but we are blunty reminded as to why it is referred to as 'the battler'.
Assuming we evr see a pullback then 0.73 will be closely watched for bullish setups as this is around the original breakout line. Only last week I had expected 73c to cap as resistance but we can see how well that call worked out.
We are however reaching several areas of potetnail resistance between 0.737-45. At time of writing we sit below the 38.2% retracement from the 0.815 swing high in May. A little higher we have the August highs at 0.745 and caps the congestion zone which the Aussie was stuck in for the majority of August. I tend to find that previous congestion zones such as this acts as good resistance upon first visit and can be thought of as a cloud in some ways (hard to define with precision). Additionally we also have a potential bearish trendline from the Sep '14 high but as this is not projected from a significant swing high I will use with a pinch of salt. It still may provide some profit taking upon first attempt and for the bullish streak to lose momentum.
If we do break above 0.745 then 0.755 becomes the next likely target. A break back below 0.728 is required to keep the bulls at bay as this would invalidate the double bottom pattern.
We can see there is no shortage of data to send some shocks either way for the Aussie. In fact I had to remove a plethora of 'orange news' to make the calendar a sensible size but all of the main themes across Australia, US and China are present.
So hold onto your hats as this could be a corker of a week, after a very strong start.
AUDUSD remains firm with ninth consecutive up day
Despite the lack of data the today the Australian Dollar hasn't lost its positive streak as we find ourselves within the ninth consecutive bullish session.