AUD/USD touches 0.9226 resistance – should conquer it

FXstreet.com (Barcelona) - Rumors of a less dovish RBA, possible hope coming from China and a technically crowded short trade combining to give the AUD/USD the fuel for the current rally. Technicians say there is likely more to come.

AUD/USD has no data Monday; trend higher likely to continue

The AUD/USD took advantage of a very oversold, crowded short trading condition to start its current rally back on the 5th of August. Then, we heard potentially AUD/USD-bullish comments from the Reserve Bank of Australia that hinted at a more balanced monetary policy than has been the case in recent months. Finally, we saw potentially bullish news for Australia’s economy out of China in the form of their Trade Balance report – which showed a healthy increase of exports to Australia in the recent quarter. All of that has combined to push the AUD/USD through multiple short-term resistance levels over the last week.

With no data due out in Australia and the US Monday, the most recent upside action has a good chance to continue, but the first resistance at 0.9226 has already been tested and may fall by the wayside relatively quickly..

Technical outlook for AUD/USD

Technicians point to the 23.6% Fibonacci retracement of the January to August decline in AUD/USD at 0.9226 as the next mild test for the cross. The way things are shaping up in terms of the actual trading action, it appears that the next resistance will be yet another conquered level sooner than later. Above 0.9226, the next key resistance won’t come into play until the 38.2% retracement line at 0.9488. The technical crowd is now saying pullbacks are buyable in the short-term with anything near 0.9000 as the first targeted entry for prospective longs.