AUD/USD Technical Analysis October 19, 2011

The AUD/USD pair had a pretty wild session on Tuesday, as traders reacted to varying headlines around the world. The European issues continue to dominate headlines at the moment, and fears out of Europe rocked the markets. The fact that the Chinese GDP numbers came out at “only” 9.1% vs. 9.3% suggests that the Chinese economy is slowing down a bit. As the Aussies supply China with a lot of its resources, the two economies are inevitably interlinked.

The resulting price action saw an attempt at 1.03, but a failure at the end of the session. The 1.03 area still looks very important to us as resistance, and should be a continued source of frustration for the bulls. Shorting this pair on weakness is still our thought, but at the moment we have no candles to confirm this idea.