Dollar slammed last week but recovered some ground on Friday.

The Dollar has recovered some lost ground against all Majors on Friday, profit taking has been blamed for the drop especially in Euro and AUD.
The drop in Dollar mid last week was hugely attributed to comments made by Fed Chairman Bernanke on his 2nd day testimony, in which he stated that smaller banks are most likely going to be affected with all the Economic concerns for the USA.

The comment itself spurred new found fears on the recession concern for the US Economy, although Growing inflation is also a concern. FOMC prioritized the growth of the economy rather than growing inflation. Therefore a further cut ranging from 25% - 75% is predicted by most economics, and a statement from Fed Chairman Bernanke, on his pledge that The FED will step in if there is further slowdown in economic growth.

AUD/USD Outlook

AUD since Friday has dropped like a stone, after creating a new high @ 0.9494 on Thursday, AUD has retreated to 0.9295 as of time of writing. The drop is hugely attributed to a bout of profit taking as February came to a close.
Possibility for another rate Hike By the RBA tomorrow is still high, a 25bp hike is expected to be announced by the RBA.
On a Technical note, AUD has been on an up move for more than a month, The move started on the 22nd of January from 0.8511 to 0.9494. the move have created an overbought market condition for AUD/USD.

Fundamentally Parity is what analyst and economist expected, but in order to achieve that a correctional pullback is necessary for the Australian dollars before aiming for the upside again.

Possibility of AUD going down for the week is there but do keep in mind that AUD is now close to a daily trendline @0.9260 area. A rejection from that trendline would create a new momentum to reach further up. Looking at the 4 hour Chart, There is a possibility of the pair forming an Bullish Hidden Divergence, not yet confirmed but the probability is high. With Price making Higher highs and Stochastic forming a lower low.

Resistance Levels

0.9494 –- February 28th High

0.9363 –- Pivot Daily

0.9425 –- R1 Daily

Support Levels

0.9260 — Daily trendline Support

0.9242 — S1 Daily

0.9180 — S2 Daily