AUD/USD (daily chart as of 7/17/2013) broke out above the falling wedge on 7/9, and reached a high of 0.93 on 7/11. The 0.93 level is the first strong resistance that the pair was expected to face. Price dropped right from that level and tested the upper boundary line of the falling wedge at around 0.90. Yesterday we had a strong bullish candlestick that confirmed the “harami” bullish pattern formed on 7/12 and 7/15. The current daily EMA 20 is located at 0.9230, and the pair needs to stand above it for further upside momentum.
On the daily RSI there are two lines – line 1 and line 2 (as shown on the daily chart). Line 1 is a well-respected resistance/support line. Price broke below line 1 on 6/19, followed by a narrow range correction. Line 2 is the second support line connecting all the lows after line 1 was broken. To be bullish, we need the RSI to stay above line 2 and break above line 1, and it would be even more bullish if it also breaks above 50. The daily MACD is making a “golden cross” right from the support line.
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