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AUDUSD : Testing Key Resistance at .8817, Should Continue to Decline

AUDUSD : Hourly Chart

Investors seems like have turned their attention from US economy to other economies and data. After declining against US dollar to the support at .8658 on the hourly chart, Australian dollar is continuously rising and following an uptrend channel. Currently it is testing the key resistance from the rising resistance trend line of the channel. Most probably the pair is going to break above this resistance as the moving average and the stochastic oscillator are signaling the same. The 100 day SMA is contracting towards the 200 day SMA and might cross above it signaling an upward continuation. However on the stochastic oscillator also, the signal trend line (red line) has just crossed below the average line (solid blue line) signaling an uptrend continuation.

AUDUSD : 4 Hour Chart

On the 4 hour chart, the pair is currently testing the resistance at .8816 which previously also resisted the pair in rising further. The overall trend still seems to be bearish as the pattern of moving averages signaling that. The 100 day SMA is above the 50 day SMA and 200 day SMA is above the 100 day SMA and all are heading downward signaling a downtrend. So accordingly the pair might decline from the rising support trend line confirming a downtrend or it will decline from the next resistance level which is at .8851 after rising further.

Fundamentally the Australian Dollar strengthened after the Reserve Bank of Australia left the interest rates unchanged however the gain seems capped as we discussed earlier. Also the demand for US dollar continues to be supported. The central bank also said that the weakening currency is insufficient to spur growth.However by historical standards the currency still remain high. I think we will continue to see decline in the pair for a while because of the strengthening US dollar.