AUDUSD Breaks Key Resistance, Eyes More Gains

AUDUSD Breaks Key Resistance, Eyes More Gains

By: Simon Furman | Where To Trade | On:2-10-2014 03:51
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Key Highlights

  • Australian dollar surged higher against a couple of other major currencies, as the Australian building permits data exceeded the market’s expectation.
  • Australian trade balance data was also released, which missed the mark with a deficit of -787M whereas the market was expecting only -700M.
  • EURUSD pair again managed to survive the 1.2580 support area, which might turn the bias to bullish in the near term.
  • SILVER and GOLD were seen struggling, as buyers face monster resistance on the upside.

AUDUSD

The Australian dollar traded higher against the US dollar earlier during the Asian session, and broke an important resistance area. There was a critical bearish trend line on the hourly chart of the AUDUSD pair, which was also coinciding with the 100 hourly simple moving average. The pair broke the mentioned confluence area and managed to settle above the same. This particular break is very crucial, as it opens the way for more upside in the coming sessions. Currently, the pair is trading just below the 61.8% fib retracement level of the last leg from the 0.8885 high to 0.8661 low. The 200 moving average is also around the mentioned fib level. So, there is a chance that the pair might dip a bit from the current levels, but it could find support around the broken resistance area.

Intraday Support Level – 0.8740

Intraday Resistance Level – 0.8800

  • Overall, as long as the pair stays above the 100 moving average more gains are likely.
  • A break above the 200 moving average would trigger a bullish wave in the short term.

AUDUSD

On the other hand, if the pair fails to break higher and did not manage to hold the 100 moving average, then it might drop back towards the 0.8680 support area. The hourly RSI has closed above the 50 level, which is a bullish sign moving ahead.

SILVER

SILVER managed to hold the $16.80 support area recently, and currently trading higher. However, the 100 hourly moving average has acted as a monster resistance for SILVER in the recent times. It is now coinciding with a bearish trend line, which increases the importance of resistance. Yesterday, SILVER failed right around the highlighted resistance zone, and traded lower. SILVER after declining managed to hold the 50% fib retracement level of the last leg from the $16.82 low to $17.40 high. It is possibly heading back towards the 100 moving average. It would be interesting to see how sellers react in that situation. A failure to break again might call for a push lower in the near term.

Intraday Support Level – $16.80

Intraday Resistance Level – $17.35

  • A break and close above the 100 moving average might call for trigger for a move higher.
  • Staying away from selling might be a wise option considering the fact that SILVER is around oversold readings.

SILVER

A retest and break of $16.80 support area would be very difficult unless economic releases in the US impress again and push SILVER lower in the short term.

Simon Furman

Simon Furman

Think Global - Act Local

Simon Furman is one of the best financial analyst with 27 years of trading experience

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