AUD/USD is holding onto most of its gains after it gapped higher at the open in Asia last night and made a new high above the 0.7266 level that had been the 2009 high since the New Years reflation trade we had at the start of the year. Rallies have been stalling at the 0.7275 level thus far. Dealers note talk of barriers at the 0.7300 level and note the 200-day mving average at the 0.7360 level hanging overhead.
In recent weeks, AUD/USD has been a proxy for the market’s view on China and many think the Chinese economy will lead the globe out of recession (not me, but many, including Sean are in that camp.)
0.7220/30 and 0. 7190 are supports on pullbacks near-term. Short-term traders should be mindful that there is a potential double top on the hourly charts which would suggest about a 50 pip decline if 0.7225 gives way.