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    Today’s Trading Edge: AUD/USD – Bullish ABCD pattern respects 23.6% Fibonacci level

     

    WWM AUDUSD MAR 9 2015

    On Saturday, Chinese Trade Balance figures were released and optimism may be returning to the second largest economy in the world.  Exports jumped more than 48% in February from a year earlier, while imports plummeted 20.5%.  The big imports miss to Australia’s largest trading partner helped AUD/USD gap lower to start trading week.  Many economists however are shrugging off the imports miss because the week-long Lunar New Year holiday gave manufacturers incentive to hold off on raw material purchases.       

    The 30-minute AUDUSD chart shows that last night a bullish ABCD pattern formed from the .7683 low.  The quick rally however appears to have tentatively respected the 23.6% Fibonacci retracement level of the February high to last night’s low move.  If we do see the Aussie climb higher this morning, key resistance will come from the 38.2% Fibonacci level at .7745. 

    In the event, we see a temporary pause in USD strength, we could see 50-day SMA, which is currently at .7923, provide critical resistance.  Downward targets may eventually include the .7500 handle, followed by the .7000 price barrier. 

    The trade: SELL AUD/USD at .7740, with a stop loss at .7790 and take profit at .7640.  The risk/reward ratio is 1:2

    Edward J. Moya

    Senior Market Strategist

    WorldWideMarkets Online Trading 

    Forex Trading Demo
     

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