6 Feb 2014
AUD/USD: Breakout of 0.8940 allows further upside - 2ndSkies
FXStreet (Bali) - After the vigorous upside reversal in the AUD/USD, Chris Capre, Founder at 2ndSkies, takes note of the counter-trend impulsive move in the pair, saying that the latest breakout above 0.8940 will likely lead to further upside.
Key Quotes
"After a more hawkish stance from the RBA, the AUDUSD hard its largest 1 day gain in over 6 months, gaining 2% on the day on Feb. 4th in a massive counter-trend impulsive move. There was a record number of shorts and leveraged positions heading into the RBA meeting, as most were betting on a further decline."
"But the change in tune led to a huge jump and massive short covering. I'm guessing there is going to be a further capitulation of shorts since the pair today just trotted in place at the highs, forming a with trend pin bar."
"Looking at the 1hr chart below, we can see the key intra-day resistance literally got broken as I was writing this article. The price action suggests the pre-breakout squeeze and 20ema carry will likely lead to further upside. I'll watch the intra-day charts around 8940 to get long, targeting 8996 and 9039 with tight stops below. Any 4hr close below 8930 suggests likely range to persist for another day."
Key Quotes
"After a more hawkish stance from the RBA, the AUDUSD hard its largest 1 day gain in over 6 months, gaining 2% on the day on Feb. 4th in a massive counter-trend impulsive move. There was a record number of shorts and leveraged positions heading into the RBA meeting, as most were betting on a further decline."
"But the change in tune led to a huge jump and massive short covering. I'm guessing there is going to be a further capitulation of shorts since the pair today just trotted in place at the highs, forming a with trend pin bar."
"Looking at the 1hr chart below, we can see the key intra-day resistance literally got broken as I was writing this article. The price action suggests the pre-breakout squeeze and 20ema carry will likely lead to further upside. I'll watch the intra-day charts around 8940 to get long, targeting 8996 and 9039 with tight stops below. Any 4hr close below 8930 suggests likely range to persist for another day."