Article originally published on innerfx.com and republished here with permission
Quote of the day: “We are never deceived; we deceive ourselves” ~ Johann Wolfgang von Goethe
Good morning. The big day is here as all eyes are on Bernanke at the Jackson Hole later today. Everyone is wondering whether he will hint of a third round of quantitative easing or similar measures. Except a few currency pairs and precious metals, the market has been rather choppy this week.
Here’s what to watch out for now:
Still consolidating in a range, finding support on the rising trendline which is connecting recent higher lows. Resistance around 1.4500 providing selling opportunities on rallies
As mentioned in my recent reports such as yesterday’s, I remain bullish on AUDUSD while carefully watching support near 1.0400. As long as we hold above, the Aussie has a good chance to break higher above 1.0500, following the equity indices; and Bernanke’s speech at Jackson Hole is likely to have a strong impact on equity markets, therefore AUDUSD. So the plan here is to hold long while being ready to reverse position on the potential breakdown below 1.0400
Horizontal resistance at the round value 1.1500 is intact after yesterday’s test but sentiment is little changed, so while we’re up here – it’s a good idea to expect more gains, rather than a reversal.
It seems that the strong correction has come to an end, at least for a while – now that support at 50% of last up leg stayed intact. We now have a nice reversal candle suggesting that a test of former support at 1800 is in the cards.