Driven by the Federal Reserve decision to raise their interest rate from 0.50% to 0.75% and hawkish comment from the Federal Reserve which plans to continue raising their interest rate in 2017, the US dollar rises again other currency, including the Australian dollar (AUD).
The pair now traded below the 0.73 and moving below the level that worth to watch. Previously, the 0.7320 is the level that acts as the daily support level. From the picture below, we can see how price respects this level several times.
AUDUSD daily chart
Since the price now traded below that area, this daily support level now acts as the new daily resistance level. We will watch closely what the price will offer around the 0.7320. With the previous event on and the sentiment is still bullish on the US dollar, we will start hunting for sell opportunity on AUDUSD. The intraday chart is also worth to watch, as the 4-hour chart shows below for an example.
AUDUSD 4-hour chart – zoom out
AUDUSD 4-hour chart – zoom in
However after such a huge moves on the US dollar, usually we can see profit taking especially with the trading activity, volumes, and liquidity that declining over the next week since it is the end of the year. So we should more careful with our own trading position.
Note: also watch the NZDUSD as the price now trade below the daily support level and broke off the low of the ‘rangy’ area, as I have been discussed on November 30th article.
Don’t forget to see my latest trading setup on: