“INDICATOR OF THE DAY” - PSYCHOLOGICAL BARRIERS
While gains have ascended to fresh yearly highs on Wednesday to 0.8470, the market has stalled just shy of critical psychological barriers by 0.8500 thus far. However, we expect this level to be taken out in the near-term.
Aud/Usd has not been above the 0.8500 level since September 2008 and with the market now just shy of this critical psychological barrier, we would expect for the level to be taken out. It is very common for traders to place stop-losses on positions above or below psychological barriers depending on the direction of their position. In this case, many stops are most probably sitting just over 0.8500 which makes the break of the level that much more realistic. While we do not expect gains to extend much beyond 0.8500 on Wednesday, we would expect to see the 0.8500 barrier taken out over the coming hours making it a key level to watch today.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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