Tuesday saw the AUD/USD gain serious strength as traders rang in the new year with optimism. The pair will follow the risk sentiment, and it appears that it is sudden strong. However, there isn’t much that has changed in our opinion since last week, so the move could be short-lived. The 1.05 level above will certainly be resistive as well, and the markets are probably overbought as a result. The 1.04 area begins the real resistance, and we are just below that. However, the candle does look very strong, so perhaps a serious test for those levels could be coming. Either way, it is hard to buy at these lofty levels. We prefer selling on signs of weakness closer to the 1.05 mark if we get them. In the mean time, we have to stay flat as it has risen far too much to buy now, and it isn’t showing any signs of weakness.
Written by FX Empire