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Technical Analysis AUDUSD : 2015-06-03

Australian GDP outstripped forecasts

Let us consider the AUD/USD currency pair on the daily time frame. According to the report, released on Wednesday, Australian GDP increased 0.9% year-over-year and 2.3% month-to-month. Better-than expected dynamics outrun American GDP indicators. Though Reserve Bank of Australia rate amounts to 2% (a historical low), it is far higher than Fed rate. According to futures market participants, after the positive GDP release the probability of rate cut in Australia decreased from estimated 40% to 25%. That is why we assume that the Australian dollar will strengthen.

AUD/USD

On the daily time frame the AUD/USD:D1 has been traded sideways below the 200-day Moving Average for 3 months. In our opinion, Bollinger Bands, MACD and Parabolic have not yet given buy signals. However, the AUD chart rebounded from the neutral trend support line, confirmed by 7 fractals, forming a bullish engulfing bar. RSI-Bars escaped from the overbought zone and reached 50. The bullish momentum may continue after the next AUD/USD bar closes above the upper Parabolic signal at 0.792. However, there are two essential factors that can interfere trading. The Greek default risk sustains as the country is to make another payment to IMF on Friday. No important economic statistics are expected this week in Australia, but significant labor market data will be published in the USA on Friday. The most careful traders are recommended to wait for the release before opening a position. A stop loss may be placed at the latest fractal low at 0.76 or below the Bollinger Bands line and the recent local minimum at the 0.752 mark, confirmed by the fractal. After pending order activation the stop loss is supposed to be moved every four hours near the next fractal low, following Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most careful traders may switch to the H4 time frame and place a stop loss, moving it after the trend. If the price reaches the stop without triggering the order, we recommend to remove the position: the market sustains internal changes that were not considered.

 

Position Buy
Buy stop above 0,792
Stop loss below 0,753


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