Good day to you my Forex friends! Guess what?!?! The Australian dollar has recently marked a new historical high over the US dollar. And from the looks of it, it seems that the AUDUSD pair has still a lot of legs left to move higher. As you can see from its 8-hour chart, the pair has been trading on a well defined uptrend for quite some time now. Earlier this week, the pair opened with a bullish gap though this move was invalidated when it fell below the bottom of the gap. Nonetheless, the tide has even turned for the better now as it formed and then broke out from an ascending triangle formation after moving past its previous all-time high at 0.9849. Gauging from the height of the pattern, the pair could run upwards by at least 150 pips more from 0.9900, bringing the 1.0000 marker in sight. As long as the uptrend holds, the Australian dollar would most likely reach parity with the greenback in the near term.
Recent talks of more money printing scheme (quantitative easing) by the US Federal Reserve has reflected negatively on the USD. Fed Chairman Ben Bernanke earlier stated the possibility of another round of quantitative easing or the printing of more money in layman’s term to support the economy by encouraging the public to borrow and to spend. Aiming to reduce the daily market lending rate by increasing the money supply would of course lessen the dollar’s valuation.
Based on the latest survey, retail sales and inflation figures in the US are expected to remain subdued. If these numbers remain flat over the next with the country’s labor market staying weak as well in the succeeding months then it is quite possible for the Fed to indeed do as it is suggesting now.