Since the Aussie broke through the resistance of the 200 SMA at 1.04, the Australian dollar gained almost 300 pips before it reached the resistance of the round number 1.07. The higher-lows pattern that occurred under the 200 SMA suggested that there was a strong pressure of buyers under these, and it was a great trade for those who implemented this trade idea. Now the price is close to the resistance in the daily chart at 1.075 and a strong break-out there will trigger many automatic orders that might launch the Aussie to the historical heights at 1.108. However, the pair is obviously overbought so it might correct down and retest the 200 SMA.
The Aussie made an important step on the way for taking over the historical high at 1.108, as it broke the 200 SMA on the daily chart two weeks ago. The price is now close to the resistance at 1.08 and the influence of the interest rate announcement from the morning will determine today's direction of the pair. If the Aussie manages to break-out the resistance, we might see the price above 1.10 by the end of the week. However, the weekly chart show nine green candlesticks in a row, which means that the chances for a red candlestick are getting higher.
The Aussie broke-through the strong resistance in the daily chart at 1.075 two weeks ago, but it failed in continuing this break-up and it revered down when it reached the resistance at 1.08. The pair corrected about 20% of the recent rally and got the support of the 20 EMA above 1.06. Yesterday, the pair broke again through the resistance at 1.075 but eventually created a red candlestick and if it slides under yesterday's low it might make a more aggressive correction. However, if the price crosses above yesterday's high, the AUD will try to break-through the recent pick at 1.084.
The Monetary Policy Meeting Minutes of the Australian central bank published this morning and they might influence the momentum of the Aussie during the rest of the day.
This pair is definitely showing strong resistance at the 1.08 area. The high on the 21/2/12, the 1.075 area, is going to be the area to watch. On my chart for today I can see a possible engulfing bar with a bounce of the 1.06 area. This may be a possible buy setup, I would look at either getting out before the 1.075 area or managing the trade and going for the 1.08 area.
The Australian dollar corrected against the USD after it got the support of the 200 SMA last week. However,
the trend has been moving in a downtrend since the end of February and it reached the resistance of the downtrend line, which increases the chances for a bearish reversal to occur in this point. If it does, the pair might
slide to the next support at 1.025, though it will have to break-down the 200 SMA before that.