Aussie indeed underwent two weeks under strong SELL pressure.
There are many reasons explain for decline of A/U:
- The first reason is: positive US economic data + better than expect of US economy drove USD becomes trong across the board.
- The second reason is : the Australia economy shows many negative signals come from mining activity, export as well as import and recently is the sharp decline of housing market; one more cause is slowdown of New Zealand, the main trade partner Australia.
With those reasons, I think that demand for Aussie would be cut down to transfer to greenback.
Moreover, next week there is a key event for A/U: RBA Interest Rate Decision, and with the decline in economic activity, I think RBA at least would keep neutral stance or even dovish stance to drive AUDUSD lower to offset the decline of economy.
- Technical Analysis:
There is a key problem I want to say:
- Kumo cloud shapes a strong which any escape would let to trend reverse.
Look at on the chart, price officially espcape from Kumo cloud, and that is the signal for the same what happen in March when A/U escaped from Kumo cloud and then rally to 0.95
Moreover, We have a head and shoulder pattern I show on the chart, and price crossed through neckline of the pattern . --> confirmative.
The last thing, A/U also cross through SMA100.
The benchmark, key support at 0.9325 was broken, A/U hold above this support was hold from Jun 5. The next support absolutely is at 0.92
I enter a SHORT position to 0.91 ,stop loss at 0.9370
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