NEW YORK (Forex News Now) – Even though there is an important interest rate statement coming out of Australia at 1:30 AM GMT tomorrow morning, the pair has already decided which direction it wants to head towards, and it is obviously upwards.
The FX rate of the AUD/USD has found the 1.01 handle, and as such is in uncharted territory, as the pair just recently broke through the “parity” level for the first time. With the recent run up in commodities, the pair should be able to continue to climb in the long run, as Australia is such a commodity rich country.
Added to the commodities is the Federal Reserve out of America going on another round of money printing, which will continue to push the prices of gold, copper, and other metals higher, thus driving the demand for the Aussie dollar higher.
On the daily chart, you can see that a recent trend line was broken, but this was simply a chance for the FX rate to consolidate, and for traders to catch their breath. As you can see now, the pair is testing the “underside” of the trend line today. While this pair is certainly in the “overbought” category at the moment, any pullbacks will have to be seen as a chance to “get involved” in the pair and will probably be treated as such by traders.
One area that will certainly see support now will be the “parity” level, as it has been significant resistance in the recent past. Also, looking at the steepness of the move, a pullback isn’t out of the question, and would be welcomed.
With the announcement coming in the small hours of the morning, it could be a “sell the news” event, but the pertinent trader will find it as an opportunity. Of course, if the RBA decides to raise rates, all bets are off, and the pair will take off again.