Daily Chart AUD/USD

The pair is currently trading in a wide sideways market between S2-R2. We have identified S1 to be a weak floor for the pair, the pair has tested this level once and the pair has failed to break it. S2 is very strong secondary floor for the pair, it has been tested three times and the pair has failed to break it.

R1 is a strong ceiling for the pair, it has been tested twice in the past and the pair failed to break it. R2 is the highest the pair has reached since early August 2013. R2 has been tested twice and the pair has failed to break it. A break of R1 could take the pair higher to test R2.

Technicals: RSI (Relative Strength Index) and Mas (Moving Averages)

· 200-day MA (orange) and 50-day MA (magenta) is converging and if the 200-day MA becomes greater than the 50-day MA this signals a bearish stance for the pair. In addition, 50-day MA and 200-day MA will provide additional resistance for the pair.

·RSI is neither in overbought/oversold region signalling that the pair is trending in our case downwards.

In the short term, the pair is neutral. With continuing tension between Russia and Ukraine this will help prop up the Aussie Dollar. However, weak growth (data to be published this week) may negate this rise. If there is still slack in the labour market (below forecast/previous reading), then there is a low probability of an interest rate hike and this will weaken the greenback. With the continuation of the taper, the greenback should gradually become stronger. 

Ajay Pankhania
Technical Analyst
Accendo Markets

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