AUD/USD Bounces Off the 200 SMA, But Let’s See How Much It Will Run
[[AUD/USD]] has been bullish since March, as most major currencies have been against the USD. But, the commodity currencies were even stronger during this time. AUD/USD climbed form 0.55 to above 0.74, which mean an almost 20 cents increase.
But the climb stopped on September 1 and the price formed a doji candlestick up there that day, which is a bearish reversing signal. AUD/USD turned bearish after that, as the USD reversed higher and has lost more than 200 pips from top to bottom.
But the decline stopped at the 200 SMA (green) on the H4 chart. AUD/USD pierced this moving average for a while, but then reversed back up and formed a hammer candlestick, which is a bullish reversing signal. The break didn’t count either, since the candlestick didn’t close below that. So, AUD/USD bounced off the 200 SMA and turned bullish, but it is finding it difficult to push above the 20 SMA now.
We are short on this pair, so we’re hoping that the 20 SMA resists and a bearish reversal follows form here. The jump came after Bloomberg leaked some ECB forecasts which should be released tomorrow. They were slightly more positive than expected, which has improved the risk sentiment in financial markets. But, they don’t offer much and the Eurozone economy is still slowing, so there’s not much to be hawkish about here.
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