Forex/FX – AUDUSD Price Action Analysis – 20th November
(Forex FX 4X, Australian Dollar Analysis)
- The AUD/USD (Australian/US dollar) has experienced extended gains today (19th November) as risk assets rallied on hopes the US may avoid the so called ‘fiscal cliff’. The currency pair gained +0.66% on the day and has moved back above the ascending trend line area, as can be seen on the daily AUD/USD chart below.
- A report showing the IMF may raise the reserve status of the AUD may have been supportive for the Australian currency, showing that central banks are looking to diversify currency holdings.
- Upside price action has been found since the a pin bar reversal candle formed on the 16/11/12. This setup came at an area comprised of a 50% corrective retrace, 200 period SMA (simple moving average) and previous support lows.
- This was the latest in a series of candle reversal setups for this currency pair. Our previous AUD/USD analysis post highlighted the daily bearish engulfing candle prior to the drop below the trend line support area.
- 1.0450 area range highs have capped the AUD/USD over recent trading and any sustained upside would need to breach this key near term area.
- Large speculators (non-commercials) are still heavily long the AUD according to the latest COT report, with 68K net long futures contracts versus the previous 60K position.
- Event risk comes with the RBA monetary policy meeting minutes due at 12:30 GMT with the associated speech from Governor Glenn Stevens. FX market participants will be looking for any additional signs/intentions that the RBA is considering a continuation of its rate cutting cycle, or not as the case may be.