By: John Ursus
Timeframe: W1 Recommendation: Long Position
Entry Zone: 0.8875 – 0.9000
Take Profit Zone: 0.9300 – 0.9325
Stop Loss Zone: 0.8700 – 0.8725
The AUDUSD has been under a lot of pressure and has corrected sharply as visible in the W1 chart above. Over the past eight weeks this currency pair has tried to form a bottom as all negative economic events including an additional rate cut by the Reserve Bank of Australia have been priced in and while Chinese data points to stabilization.
The health of the Chinese economy is crucial to the strength of the Australian Dollar. Any dip below 0.9000 should be viewed as a nice buying opportunity as it is bound to launch a rally which should take it back to its Fibonacci resistance level roughly 300 pips from here. A breakout would open the way up to 0.9600.