One positive news after another propelled AUD$ close to parity from the recent low of 0.9582.
The tricky part here is that short term indicators is showing bearish divergence at overbought levels but longer term ones suggest a potential extension. From my experience with this currency pair, when it trends, don't trade the opposite direction but look for good levels to join in.
The bullish momentum in AUD$ should provide support for the EUR$ but one has to watch the EURAUD cross closely too. Always remember that EUR$ is the new USD and it does not always imply that EUR$ will rally the same as the commodity currencies.
Today, we have the Spanish bond auction and Ben Bernanke's testimony to provide some stimulation to the price action. Stop losses in the EUR$ above 1.2620 and 1.2650 will attract lots of attention if Fed Chairman hints of further stimulus.
I remain bearish on the USD and believe market will continue to love risk in the weeks ahead.
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