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AUD USD Analysis – Breaks Above Ichimoku Cloud


Jan.22.2017

G'day mates! I'm back from a trading conference at the University of Westminster in London, right in time for an IDDA approach AUD USD analysis. China had a bunch of data out in the past couple of weeks. The US has a brand new president in the White House. How are Mr. Aussie and Ms. USA dealing with the news?

 

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AUD USD Analysis - Fundamental Points

Aussie side: Our mates in the Land Down Under have been doing alright in the past couple of months. Their November Trade Balance beat expectations by a LOT in January. Also, for the second consecutive month, Australian job growth has beaten expectations. However, it wasn’t enough to prevent a lift in the national unemployment rate. The majority of the increase in December came from full time employment which rose by 9,300, outpacing a 4,200 gain in part time employment.

Chinese side: China’s economy seems to have stabilized, even as the manufacturing sector continues to contract. So, 2017 seems to be a somewhat good start to China’s so-called “13th 5-year plan” for 2016-2020, which wants to shift the Chinese economy from a heavy-industry dependent, export-driven economy to one that’s driven more by domestic demand and a cyber-economy.

Retail sales have been climbing on yearly basis. The reading for December was the highest since December 2015. Also, fixed asset investments in China continue to grow at a steady rate, which would definitely help ease the transition. China does have a problem with inflation, though. December’s 2.1% reading missed PBoC’s 3% target by a very wide margin. Still, there are some optimistic signs in that the core reading continues to trend higher.

 

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US side: Donald Trump has officially become the POTUS (President of the United States.) However, the market participants remain unsure about his next steps on fiscal policy. While some analysts argue that Trumponomics will make the USD stronger, others are in wait-and-see mode. Because, you never know what will come out of The Donald's Twitter account next.

 

AUD USD Analysis: Technical Points

After forming a massive Doji candlestick pattern on the daily chart on Friday, the AUD/USD  pair started Monday's Asian session on a bullish sentiment, confirming a break above the daily Ichimoku cloud.

 

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We have yet to see the Tenkan, Kijun and Chiko span confirmations. The short-term resistance is set at 23% Fibonacci at 0.76. Long-term pivot is set at 0.7690, and long-term resistance and profit target is set at the long-term 38% Fibonacci at 0.7830.

 

AUD USD Analysis - Daily Chart Technicals AUD USD Analysis - Daily Chart Technicals

 

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AUD USD Analysis:  Market Sentiment

47% of traders are long AUD/USD in one of the largest forex brokers in the US.  Short positions are below levels seenin the last couple of weeks. We use this as a contrarian indicator to price action, and the fact that the majority of traders are short gives signal that the AUDUSD may continue higher.  Stay tuned for more on market sentiment for AUD USD analysis in our investing group.

 

AUD/USD Trading Strategy

Calculate your risk tolerance and use the levels mentioned below to create a strategy suitable for you. For further help, please visit our investing group.

Here are Invest Diva's calculations for important approximate levels for AUD/USD to keep an eye on:

 

Support Levels Turning Point Resistance Levels
0.7330 0.7450 0.7690
0.7210 0.7690 0.7830

 

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