AUD/USD Surge Following RBA Comments

AUD/USD (daily chart as of February 4, 2014) surged after the RBA dropped its reference to the currency being uncomfortably high and hinted at a possible end of the current easing cycle. The pair continued to trade higher today to test the daily EMA 50, which served as strong resistance in January.

Current price is facing the resistance confluence of a short-term support/resistance line connecting the December 18 low and the January 8 low (blue line on chart), and the daily EMA 50 resistance. Price tested that short-term resistance line on January 22 but failed to break above it by touching a fresh low of 0.8660 on January 24.

If the pair can clear the resistance confluence, recent upside momentum could continue to test the daily EMA 100. If it is unable to break those resistance lines, it could turn down to test 0.8820 and then the short-term support line connecting the January 24 low and the February 3 low (green line on chart).

Support levels below:
1st support: 0.8820 (multiple highs and lows)
2nd support: the green line on chart
3rd support: 0.8660 (January 24 low)

Resistance levels above:
1st resistance: the resistance confluence
2nd resistance: daily EMA 100
3rd resistance: 0.9085 (January 13 high)