Forex Trading News: Australian Dollar rallies to 1.0947 as USD weakens

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The Australian Dollar gained over 80 pips in today’s Asian session, rising from a session open of 1.0865 to reach a 29 year high of 1.0947, following a dovish outlook from the US Federal Reserve. The Australian Dollar has been on the rise, following Ben Bernanke’s speech in yesterday’s US session, in which the market came to the realization that the Fed will likely keep its current low interest rate of 0.25% for a long time to come.

The recent rise see’s the Aussie having gains over 12.5 cents in 6 weeks, from a dip which the AUSUSD pair experienced on the 16th of March. The Aussie is currently between the 161.8% and 261.8% Fibonacci extension levels of the December 31st to March 16th drop. The 261.8% Fibonacci extension is seen around the 1.1135 levels.

From the Hourly chart we can see that the Aussie has receded from an overbought position, while the 4 hour and daily charts still see the AUDUSD pair at an overbought level. The market is however expecting to see the Aussie keep rising further to the recent weakening of the USD which has seen the index of world’s reserve currency drop to a 3 year low of 72.87.