Can Options-Derived Levels Catch AUD/USD On Jobs Data, Fed Speak?

While the fundamentals seem to point to Australian Dollar weakness, the daily AUD/USD chart shows that prices could turn higher soon. This is because positive RSI divergence is signaling that the pair is running out of downside momentum. While this does not guarantee an imminent reversal, it is worth watching over to see what develops. With that in mind, let’s see where prices may go in the event of one.

From here, immediate resistance is the “day range high” of 0.7522. A push above that exposes the “week range high” at 0.7558. This area is just below the May 11th and 14th highs and a close above them could mean that prices may put in a more lasting correction that reverses the pair’s downside progress since mid-April.

If AUD/USD falls then it could be held up by the “day range low” at 0.7426. A break below that would expose the May 9th low at 0.7412 which is almost perfectly aligned with the 38.2% Fibonacci extension. A push below that places the “week range low” at 0.7390 as the next target.

(Click on image to enlarge)

AUD/USD daily chart with positive RSI divergence

 

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Disclosure: DailyFX, the free news and research website of leading forex and CFD broker FXCM, delivers up-to-date analysis of the ...

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