AUD/USD’s rally might soon be over as the pair is finding resistance at the top of the falling channel on the 1-hour time frame. Stochastic just crossed down from the overbought region and is pointing down, suggesting heavy selling pressure up ahead.
Those needing more confirmation could wait for momentum to push the pair below the .9200 major psychological level. Bernanke is set to make a speech in today’s US session and possibly boost the dollar if he maintains that the Fed is ready to reduce bond purchases by the end of this year.
The pair could fall back to the .9000 major psychological support level, which is also around the bottom of the channel. A stop above the .9300 handle could yield a 2:1 trade while a stop right above the channel test would give a larger reward to risk potential.
By Kate Curtis from Trader’s Way