The bullish tone for the Aussie dollar continued overnight and into this morning’s London trading session, with the daily chart of the June futures contract moving firmly higher once again and preparing to test the very strong level of resistance at the 0.9400 level. This current move higher was initially signalled by the isolated pivot low of early June, and since then the pair has seen seven days of consistent gains, with the 0.9200 region providing the requisite platform of support for this move higher.
For the Aussie dollar to progress the 0.9400 resistance area is key following the failures in April and early May, and provided we see a clean break and hold above this level there is no reason why the pair should not continue higher and on to test the 0.9617 area of October 2013. The volumes associated with the current move remain average or above, but for any sustained breakout we do need to see these volumes also rising in tandem with the pair. The daily chart of the currency strength indicator to the left is suggesting that the Aussie dollar has some way to go before reaching an overbought status in this time frame.
By Anna Coulling