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    Technical Analysis AUDUSD : 2015-05-05

    RBA rate cut

    Today we examine the Aussie chart AUDUSD as a significant fundamental event happened yesterday: the Reserve Bank of Australia cut the rate from 2.25% down to 2%, as expected by market participants. Earlier the Australian dollar was weakening for four straight trading sessions, but today it has risen strongly despite the lowered rate. An old trader’s saying “buy the rumor, sell the news” worked out. Most investors explain such currency activity with the supposition that the next rate cut will happen in a very remote future. As the Australian Q1 CPI was only 1.3%, in theory, Aussie considering the current rate of 2% might be quite attractive.

    AUD/USD

    The AUD/USD:D1 is trying slowly to rebound after falling almost 28% over the past two years. It reversed upwards after being traded sideways for three months. Thereafter, the AUD/USD currency pair dropped on expectations of falling rates and returned once again to the upper boundary of the range. RSI-Bars oscillator indicates the uptrend. Its last bars reached overbought zone and then pulled back. The downward bias of the moving average (200) is decreasing. In our opinion, the momentum might be formed after the price growth and overcoming the upper Donchian Channel border and the last fractal high at 0.808 or, in case of price falling below the last Parabolic point at 0.774. Let the market choose the price movement scenario. Two or more pending orders may be placed symmetrically: when one of them is activated, the other can be canceled, since the market has chosen the direction. After pending order placing, Stop loss is to be moved every four hours near the next fractal high (short position) or fractal low (long position), following Parabolic signals. The most careful traders can switch to the H4 timeframe after order execution, placing Stop loss and moving it according to the price direction. Thus, we are changing the probable profit/loss ratio to the breakeven point.

     

    Position Sell
    Sell stop below 0.774
    Stop loss above 0.808

     

     

    Position Buy
    Buy stop above 0.808
    Stop loss below 0.774

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