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Technical Analysis AUDUSD : 2015-06-25

Will the bullish momentum resume

Let us have a look at AUD/USD pair on the daily timeframe. Economic activity accelerated in Australia in the first quarter of 2015 as the GDP grew 0.9% over the previous quarter, following an 0.5% expansion in the fourth quarter of 2014. On May 15 the 2015 federal budget was announced with measures to support small businesses such as 1.5% cut in small business income tax rate, and $5.5 billion for instant write-offs for assets purchased by small businesses for less than $20,000.

The pair rose after the RBA left the interest rate unchanged on June 3. The RBA expects the economy will grow 2.25% in 2015. In May the unemployment rate fell 0.1% to 6.0% as 42 thousand new jobs were added compared to the previous month. The Westpac consumer confidence index fell to 95.3 points in June from 102.4 points in May, while the National Australia Bank business confidence index jumped to seven points in May from three points in April, recording the highest reading in nine months. On June 17 Australia signed a landmark free trade agreement with China that will let 85% of Australian exports enter China duty free and provide improved access for Chinese investments as China plans to invest more than $500 billion in Australia over the next five years. The deal will provide a significant boost to Australian economy and thus support the AUD.


The AUD/USD has been trading sideways in the last four months. The pair rose after the RBA left the interest rate unchanged on June 3. The Parabolic indicator gives a buy signal. The RSI-Bars oscillator moves within a bullish channel. The Donchian channel has also sloped upward. The breach and closing above the upper Donchian channel, confirmed by last fractal high at 0.78492, will signify the resumption of bullish momentum. A pending order to buy can be placed above that level. The stop loss can be placed below the lower channel boundary at 0.76804. The bullish momentum may also be confirmed by oscillator resistance break-out at 54.47. Conservative traders are recommended to monitor this signal. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level without reaching the order, we recommend cancelling the position: the market sustains internal changes which were not taken into account.


Position Buy
Buy stop above 0.78492
Stop loss below 0.76804

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