Wednesday, October 7, 2015

AUD/USD: R2, done and stable there...Now where?

FXStreet (Guatemala) - AUD/USD is currently stabilizing at R2 after a bidding good time post the RBA's bullish rhetoric overnight.

AUD/USD rallied last night after the RBA left rates on hold, but let the markets know that that bar is high in respect to their tolerance for interest rates and how the Australian economy is performing.

The RBA left rates on hold for a 5th month at 2% and remain optimistic. We now await San Francisco Fed President Williams on the outlook post the close of the US session. Analysts at TD Securities explained, "We expect that he will continue to express the Fed's desire to raise rates this year but will listen closely for any subtle shift in tone following last week's Nonfarm Payrolls disappointment."

Technically, AUD/USD bullish/neutral - (High so far is 0.7156 and spot 0.7154 and stable on R2 at time of writing)

Noting yesterday's rally, the price went from the 4hr 200 SMA and today's pivot at 0.7080 on the RBA's call. 0.7120/25 was a resistance area and price was faded to the 20 SMA on the hourly chart at 0.71 the figure.

London, and with the help of US traders, took the price up to current levels while RSI (14) creeps closer in on 70, currently at 68.75, and price is consolidating. Next stop is R3 at 0.7186 on the upside while profit taking may take us back as far as the pivot at 0.7080 ahead of S2 at 0.7010.

Caution - you can dance until the RBA stops singing

Bulls, be aware of downside factors that can be read into further here.
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