Price action on AUD/USD (a four-hour chart of which is shown) as of Tuesday, November 2, has shot up to continue its entrenched uptrend on the heels of an unexpected interest rate hike by the Reserve Bank of Australia.
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(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
This bullish move reached all the way back above parity (1.0000), which was last touched in mid-October, before stalling. The high that was just reached today represents a fresh 28-year high for the pair. In the event of continued bullish momentum that rises significantly above parity, a key upside resistance target resides in the 1.0300 price region, which is a confluence of important Fibonacci extension levels.
In the event that price turns down around the parity region and continues the prolonged consolidation that has been in place for several weeks now, downside support continues to reside around the 0.9650 price region, the lower border of the consolidation.
By James Chen, chief technical strategist, FXSolutions.com
