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22 Mar 2013
Forex: AUD/USD rally should attract fresh dip buyers
FXstreet.com (Barcelona) - The Australian Dollar has enjoyed what seems, given the overstretched rise off 1.0363 low all they way up to 1.0457, large institutional bids, leading the pair to a new 7-week high before consolidating at 1.0430 vicinity.
Following yesterday's report where we point out that messy price activity between 1.0350 and 1.04 had to be first unraveled to set a particular direction, market forces, in this case buyers, made up their mind, blowing 1.04 supply with price peaking at the exact same level as last Feb 5 high of 1.0457.
The break is bullish for the Australian Dollar, suggesting dip buyers should be busy picking 'value areas' to go long from.
Since Thursday's rally was pretty strong, there is some clean room for price to fall until faced with first significant area of demand at 1.04, as per the imbalance last European session. The 1.0420 intraday demand should give up first though, as per base carved out ahead of the last US session.
On the upside, there is now a notable area of fresh supply - not tested yet - around 1.0467/75, where sellers should be camped to try some shorts should risk reward prospects make the play attractive.
According to Sean Lee, founder at FXWW, "the short term charts look constructive and favour a dip-buying bias back to 1.0400 or preferably to 1.0370. Recent daily highs at 1.0475 provide the resistance levels."
During the current Australian session, the calendar is vacant for potential price swing triggers, which may pause the actual rate from testing mentioned key areas where buyers and sellers may be camped until the next European morning, where any Cyprus-inspired risk-aversion move may be seen as the opportunity to buy those dips.
However, as Sean Lee adds: "If risk-aversion picks up in the wake of more Cypriot uncertainty, then the AUD/USD will come under more selling pressure so bulls still need to be careful about picking the correct entry level and bears will not be too worried about selling into sizeable rallies."
Following yesterday's report where we point out that messy price activity between 1.0350 and 1.04 had to be first unraveled to set a particular direction, market forces, in this case buyers, made up their mind, blowing 1.04 supply with price peaking at the exact same level as last Feb 5 high of 1.0457.
The break is bullish for the Australian Dollar, suggesting dip buyers should be busy picking 'value areas' to go long from.
Since Thursday's rally was pretty strong, there is some clean room for price to fall until faced with first significant area of demand at 1.04, as per the imbalance last European session. The 1.0420 intraday demand should give up first though, as per base carved out ahead of the last US session.
On the upside, there is now a notable area of fresh supply - not tested yet - around 1.0467/75, where sellers should be camped to try some shorts should risk reward prospects make the play attractive.
According to Sean Lee, founder at FXWW, "the short term charts look constructive and favour a dip-buying bias back to 1.0400 or preferably to 1.0370. Recent daily highs at 1.0475 provide the resistance levels."
During the current Australian session, the calendar is vacant for potential price swing triggers, which may pause the actual rate from testing mentioned key areas where buyers and sellers may be camped until the next European morning, where any Cyprus-inspired risk-aversion move may be seen as the opportunity to buy those dips.
However, as Sean Lee adds: "If risk-aversion picks up in the wake of more Cypriot uncertainty, then the AUD/USD will come under more selling pressure so bulls still need to be careful about picking the correct entry level and bears will not be too worried about selling into sizeable rallies."