Technicals | Jul 26 2011
The TechWizard reports he is watching AUD/USD closely as he believes the cross carries a clear upside bias.
The fact AUD/USD has consolidated above parity since peaking above 1.10 earlier this year is seen as a clear positive. All the bulls now want to see is a weekly close above 1.10, reports the Wizard. Once this achievement is in place he predicts it'll be off to the races again for the Aussie dollar. The Wizard sees a potential run extending to 1.15, if not 1.18.
However, he also warns the first condition -closing above 1.10 on weekly closing basis- hasn't been met as yet, so traders should refrain from getting overly excited just yet.
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Given the subsequent sell-off for Australian equities when AUD/USD hit 1.10 earlier in the year, investors should be prepared for a similar reaction if and when AUD/USD goes for a big run upwards, warns the Wizard.
He notes his positive view is supported by a rising 20M/A and a bullish MACD. All in all, the Wizard's view leans towards a pending break-out to the upside for AUD/USD.
The TechWizard is the pseudonym of Scott Morrison, whose experience in financial markets exceeds twenty years. Morrison operates his own website nowadays at www.techwizard.com.au. All views expressed are the TechWizard's, not FNArena's (see our disclaimer).
Technical limitations
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