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Trade Australian Dollar vs US Dollar


Jul.20.2013

Let’s take a ride on the Forex Diva’s four-wheel-drive on AUDUSD.

Technical Analysis

AUD/USD – 4 Hour Chart

Will the 50% Fibonacci level hold? After a period of consolidation during the uptrend that started July 25, the pair has been moving down today, breaking the previous support of 1.04485. It is currently showing further bearish movements towards the 50% level. Of course, if this strategy works, you would want to buy the pair at the cheapest price. We could wait and see if it reaches the 61.8%.

[caption id="attachment_608" align="alignnone" width="500"]AUD/USD Technical Analysis with Fibonacci Retracement Australian Dollar (AUDUSD) 4-Hour Chart, August 17, 2012[/caption]

AUD/USD – Daily Chart

The Daily candles are trading above the Ichimoku cloud, signaling more gains. We can expect the pair to be supported at the upper band of the Ichimoku cloud in the 1.02 area.

[caption id="attachment_609" align="alignnone" width="500"]AUD/USD Technical Analysis with Ichimoku Cloud Australian Dollar (AUDUSD) Daily Chart, August 17, 2012[/caption]

AUD/USD – Monthly Chart

AUD/USD has been consolidating on a monthly basis in an overall uptrend dating back to 2008. The candles seem to be breaking out the upper level of a symmetrical triangle connecting the highs and lows of 2011 and 2012, which can be signaling a continuation pattern of the previous uptrend. A break above 1.06 can open doors to more gains to 1.10749.

[caption id="attachment_610" align="alignnone" width="500"]AUD/USD Technical Analysis with Symmetrical Triangle Australian Dollar (AUDUSD) Monthly Chart, August 17, 2012[/caption]

This was the first wheel of the forex four-wheel-drive. Forex Diva NEVER places an order before carefully analyzing all of them.

Fundamental Analysis

Australia’s Treasury said the central bank would be able to ease monetary policy if the currency’s gains are hurting the economy. This may have been one of the triggers behind today’s declines.

 

Next week, the Reserve Bank of Australia (RBA) will release minutes of its Aug. 7 policy meeting, at which policy makers left interest rates unchanged at 3.5 percent. Losses in the Australian and New Zealand dollars were limited as gains commodities and stocks supported demand for higher-yield assets.

Sentimental Analysis

According to the SSI (Speculative Sentiment Index) which is a contrarian indicator, we can expect more AUD/USD gains. The ratio of long to short positions in the USD/CHF is nearly 54%. This is not a very strong ratio. Yesterday, 64% of open positions were short. The battle between bears and bulls is very close at the moment. Tough call.

Capital Analysis

Things to check before placing a potential buy order:

  1. The spread of AUD/USD with your broker
  2. The amount you are willing to risk losing
  3. A careful leverage based on the amount of your disposable money

If buying at a 4-hour Fib level…

  1. Set your limit, and please don’t be greedy
  2. You can take profit at any of the upper Fibo levels; If you buy at 50% level at 1.03910 for example, you can look to sell the 38.2% at 1.04433, and so on

Happy trading!

Forex DivaBy Kiana Danial

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