The AUD/USD shot straight up during the session as the “risk on” trade came back into the fold as the central banks of the world have coordinated to make the borrowing of Dollars cheaper for the banks of the world. The idea is that it will take the idea of another Lehman Brothers collapse off the table. The Aussie shot straight to the 1.03 level where it finally met strong resistance at the 61.8% retrace. The knee-jerk reaction is strong, but if you look at the AUD/USD over the last couple of days, to say it is overextended isn’t exactly a stretch at this point. We are willing to fade this rally unless we clear the 1.03 again. We are looking for shorter time frames to lead the way for a nice fade.
Written by FX Empire