Forex: AUD/USD rises to 3-month high

Technical update

Forex: AUD/USD rises to 3-month high September Monday 16th_: The AUD/USD ended last week’s trading with a 0.48 percent gain, closing at 0.9243 on Friday. The pair initially rose above the strong 0.9300 resistance but fell sharply from the week’s high of 0.9353 to close below the psychological 0.9300.

Today the AUD/USD began trading with a large 77-pip gap up, seemingly on the back of yesterday’s news that Larry Summers has withdrawn his candidacy for chairman of the US Federal Reserve, prompting a sell-down of the US dollar.

So far today, the pair has reached a high at 0.9388, its highest point since 19 June. At the moment the quote is trading at 0.9353, right at the 12 September high. A short term upwards movement was to be expected with the MACD (9,12,1) forming a bullish convergence on the 1H chart on Friday.

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If the breakthrough above 0.9300 proves not to be fake, the AUD/USD could rise to test the 0.9400 level first and 0.9500 next. Contrariwise, the price action would be aimed at closing the gap and continuing a depreciation towards the 0.8900 support level.

The Empire State Manufacturing Index for September (forecast for a rise to 9.2 points from 8.2 points in August) and Industrial Production m/m for August (half a percent rise expected) are due out later today.

Levels of resistance today: 0.9355, 0.9390 and 0.9400/15.

Levels of support: 0.9320, 0.9300, 0.9280 and 0.9230.

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