The Australian dollar is trading higher this morning on the back of a weakening US dollar.
“Clearly the Aussie was the best performing currency besides the Yen in the past 24 hours as traders and investors continue to support it,” said Greg McKenna, chief market strategist at CFD and FX broker AxiTrader.
He added, “The question of where to next (for the Aussie) is the interesting one. I see a case building for a test and possible break toward 80 cents in the next 6 months.”
According to McKenna the US presidential debate is going to be the big event on the global market’s calendar today. It’s a scene setter as we count down the final six weeks of the US presidential campaign.
“It’s no overstatement to say this is probably the most important presidential debate for traders in years – possibly ever.”
He said it means the outcome of the debate this morning, and how it informs thinking on who is likely to be the next President of the United States, is a big deal for markets today.
“And it’s a big deal for the Aussie dollar which remains relatively strong at 0.7630/50 – less than a cent below massive overhead trendline resistance,” McKenna said.
He added that based on the Aussie dollar’s chart and price movement, the resistance zone above 77 cents is a long established one.
“I always respect trendlines unless or until they break. And the confluence of resistance between 0.7720 and the years high around 0.7830 (including the 38.2% retracement of the fall from 93 cents) means that this is a tough zone to break,” McKenna said.
He added that support remains strong for the Aussie dollar and it’s worth thinking about the chance, “I’d say 40% and rising at the moment, that we see the AUDUSD head to and through 80 cents in 2017.”
Looking on the day and the 0.7580/7600 remains short term support. It held on the pulse lower late in Asia yesterday and is the key level short term traders are watching. Topside 0.7660/75 is resistance. If either side of this range breaks I’m looking for a half a cent move.
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