IFC Markets - Analytics

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    Technical Analysis AUDUSD : 2015-04-20

    Preparing for probable trend escape

    Today we would like to draw your attention to the AUDUSD currency pair. On Sunday People's Bank of China cut the minimum reserves for commercial banks in order to stimulate lending and boost economy. Australia is the largest resource exporter to China. Market participants believe that if economic recovery in China continues at a fast pace, the rising demand for raw materials may strengthen the Australian currency. Due to that on Monday the AUDCAD hit the monthly high 0.7842 and may increase further. Wednesday morning Consumer Price Index will be published in Australia. The tentative outlook is positive, which may underpin the Australian dollar. Other important economic statistics are expected only in late May.


    The AUDUSD:D1 currency chart have been traded in a range for more than two months. Now the price is moving up, having renewed the yearly high yesterday. Parabolic indicator shaped a buy signal. RSI bars breached 50 and hasn't yet reached the overbought zone. We do not exclude the bullish momentum to continue, if the AUDCAD escapes the side range, breaking out the Donchian upper boundary and the fractal level at 0.7912. A buy pending order may be placed at that mark. A stop loss may be placed at the recent lower fractal and the latest Parabolic signal, which has taken shape, - 0.7535. After pending order placing, the stop loss is to be moved every day near the next fractal low, following Parabolic signals and Doncian channel (if it appears). Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss without reaching the order, we recommend cancelling the position: market sustains internal changes that were not considered.


    Position Buy
    Buy stop above 0,7912
    Stop loss below 0,7535

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