AUD/USD 1H Chart 8/8/2012 2:15PM EDT
So far this week, the AUD/USD has been flattening out against a rally that goes back to the June 1 low of 0.9590. It is finding resistance just below 1.06 (at about 1.0595), a psychological resistance as well as a previous support pivot for a consolidation period during February. We noted this resistance during the previous post on Friday (8/3) when the pair surged after the positive US NFP.
In the 1H chart we see this market in a sideways consolidation with a slightly lower low during the 8/8 session (1.0530) than the 8/6 session low (1.0535). The 8/8 session is winding down in US trading and as of 2:15PM EDT, the market has shown an intra-day resistance at 1.0580. Looking at the RSI now, it appears that the reading is becoming stuck between 40 and 60, which would reflect the momentum during consolidation.
A retest of 1.0530 may be in order. Also, a push to 1.05 would satisfy a swing projection seen in the 1H chart. If this sideways consolidation does indeed extend with some bearish bias, a key support resides at 1.0440. This was last week’s support as well as a resistance pivot from 7/19-7/20.
Note that this scenario is bearish in the near-term, but is still within the medium term bullish mode. Since the mode is bullish, we should not expect the bearish outlook to be aggressive, but realize the potential for such a correction. On the other hand, if the bullish mode continues without this correction scenario, a break above 1.06 opens up the next resistance pivot in the 1.0845-1.0850 area, the 2012-highs set in January and February.
AUD/USD 1H Chart 8/8/2012 2:20PM EDT