…and overall dollar selling
The AUDUSD is racing higher encouraged by the overall dollars selling after Fed chair Powell’s Jackson Hole speech and overall risk on sentiment help by rising stock prices. The NASDAQ index is currently at 148 points or 1%. The Dow industrial average is up 231 points or 0.65% and the S&P is up 33 points or 0.74%.
Looking at the hourly chart, the AUDUSD moved above the 50% retracement at 0.72659 and the swing highs for the week at 0.72795 on its way to test its 61.8% retracement of the move down from the August high to the August low. That level comes in at 0.73036. The high price just reached 0.7306 and has backed off into the London fixing.
Nevertheless, the break above the 50% level in the high for the week is a step in the more bullish direction. Stay above those levels keeps the buyers in control at least in the short term.
Having said that, there is a key resistance level above that could give buyers some cause for pause. Looking at the hourly chart the 0.73163 to 0.73226 area is home to a pretty solid swing area. That area stalled falls on July 28, August 10, August 11, August 13 before becoming a ceiling on August 17 after breaking below the floor level (see red numbered circles). That area should find risk focus sellers leaning on a test (profit taking?), with stops on a break above as risk can be defined and risk can be limited.