Aussie dollar rebounds from Asian trading session

ForexNewsNow | Published on November 12, 2010 at 11:18 am

Aussie dollarNEW YORK (Forex News Now) – The Australian dollar has started to rebound against the earlier sell off in Asian and European trading during the American session.

It is quite common to see the Americans attempt to reverse the move during European hours, and this looks like that may be the case again today. The Aussie, being tied closely to gold, appears to be tied to the yellow metal again today. The FX rate of the pair is under the parity level for now, but the bar shape that is starting to form is a “hammer”, which is an extremely bullish pattern for the FX rate of the AUD/USD, if traders can close the day near the area we are in now.

Marked by an oval on the chart is an area that was previously consolidation, which is a natural place to find support for the pair, as there will be plenty of traders that were there pushing the FX rate higher previously. As resistance almost always gets retested as support, this move would not be unexpected, and in truth will be welcomed by traders that missed the original push north on this pair, as there will be a lot of them that have been watching this pair due to the “historic” nature of parity.

Of note on this chart is not only the parity level, but the 0.97 area, which was the previous support for the consolidation area that was pointed out via the oval. The measured move of the consolidation box is roughly 300 pips, which would indicate a potential target of 1.03, which has not been reached. Quite often it will take a second attempt to reach the final destination, and the Americans look determined to make it happen, even with this rest.

AUDUSD Nov 12

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