ForexPros Daily Analysis July 05, 2011
Aussie & Kiwi review ahead the Australian cash rate
There is lots of news regarding the Australian economy that have been published during the past two days. Building approvals went down by almost 8% and retails sales dropped 4.5%. The Australian cash rate will be published in the morning, without any surprises expected.
The current resistance area is at 1.08 and a strong break-up might take the Aussie to 1.10, but it will have to cross 1.09 before that. Nevertheless, there is a probability for declines as many investors might try to take profit of the recent risings. In that case, a technical correction might reach to 1.058-1.065.
Reminder: I had estimated last week, when the Aussie was at 1.045, that reversal was about to come. The Australian gained about 300 pips since then.
The kiwi usually moves along with the Aussie, so it will be interesting to see how it reacts to the Australian cash rate announcement. The NZD is a powerful currency, especially in the last few days’ momentum, but it doesn’t necessary mean that the NZD will follow the AUD this time.
The 20 EMA is moving parallel to the 50 EMA, which indicates for prices strengthening. On the other hand, stochastic indicates for overbought so you have to be careful from entering the market in such high levels. A technical correction might cause a slide to 81.5-82.0
A break-up of the bullish-flag will be approval for the historical break-up in the monthly chart.
Forex Trading analysis written by Bastian Rubben for Forexpros.
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