After a night of USD weakness resource currencies are higher. The recent strength of AUD/USD is attributable to a combination of factors, including USD weakness and a recovery in commodity prices, especially oil and iron ore. This strength flies in the face of RBA interest rate cuts and low levels of inflation.

The good news for AUD bears is the elevated levels for establishing shorts. And the four hour chart is setting up nicely.

The arrows on the chart point to a double top formation. If the pair drops below the support at 0.7670 the MACD will likely cross, giving a sell signal. I’m an initial seller at 0.7665. I’ll add to the short if it drops below the near low at 0.7637

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.