AUDUSD
The AUD/USD pair is one of the exchange rates that outperformed the most this year. It sits at the year’s highs with only a few trading days left out of the trading month.
The relentless rally in the commodity prices triggered the move higher in the Australian dollar too. Australia is a big commodities exporter and thus, the local currency is directly correlated to the commodity prices.
On top of that, Australia had tremendous success in containing the spread of the virus. Now that vaccines are being rolled out all over the world, the Australian economy will likely perform even better.
Yet, the Reserve Bank of Australia is not happy. During its February meeting, it surprised the markets with its dovish tone, but the Australian dollar failed to react. As such, the upcoming meeting next week is likely to bring renewed warnings from the RBA related to the currency’s strength.
The hourly chart below shows a huge bearish divergence with the RSI. While the timeframe is not that significant, the divergence calls for caution. A new high is possible, and bulls should not discount a move above 0.7950 or maybe even 0.80, just to test the round number, but bears wait with selling orders. A possible way to trade the spike higher is to place a pending sell limit order at 0.7950 with a stop at 0.8050 and a move back to 0.75.
