AUD smashes resistance with the biggest gain since March 2017
Trade set up: AUDUSD enjoyed a rally of 133-pips on the session, which to put into context was the biggest one-day move since March 2017, and was in effect a 3.1 standard deviation move. So, the move in price was punchy and was statistically significant. These moves relative to recent behaviour are rare.
Why we like it: This abrupt move broke through a trendline formed back in January 2018, as well as the 17 October high and double-bottom neckline. It has also confirmed the bullish divergence we have been highlighting on the daily chart. The importance of this corrective AUD narrative should not be neglected.
Our price entry has been triggered, however one should consider the sheer magnitude of the move before entering around current levels. Our preference is to see some of the heat come out of the move and look for buy orders into 0.7165. Eager traders would be looking at stop loss at 61.8% retracement of the previous daily bar 0.7120 and more conservative traders can look at stop loss below the previous low 0.7050.
The risk to the narrative relates to Aussie September retail sales, with the consensus calling for 0.3%mom growth. Perhaps more importantly, the PBOC which will set the CNY fix rate at 12:15aedt and should they set the USDCNY midpoint rate lower than the market expects, it would drive Aussie higher. Ahead of the NFP payroll data tonight we see the risk in the USD skewed to the downside as a potential lower print of the wage growth data could underpin USD weakness, sending AUDUSD towards 0.7300 and higher.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation
Why we like it: This abrupt move broke through a trendline formed back in January 2018, as well as the 17 October high and double-bottom neckline. It has also confirmed the bullish divergence we have been highlighting on the daily chart. The importance of this corrective AUD narrative should not be neglected.
Our price entry has been triggered, however one should consider the sheer magnitude of the move before entering around current levels. Our preference is to see some of the heat come out of the move and look for buy orders into 0.7165. Eager traders would be looking at stop loss at 61.8% retracement of the previous daily bar 0.7120 and more conservative traders can look at stop loss below the previous low 0.7050.
The risk to the narrative relates to Aussie September retail sales, with the consensus calling for 0.3%mom growth. Perhaps more importantly, the PBOC which will set the CNY fix rate at 12:15aedt and should they set the USDCNY midpoint rate lower than the market expects, it would drive Aussie higher. Ahead of the NFP payroll data tonight we see the risk in the USD skewed to the downside as a potential lower print of the wage growth data could underpin USD weakness, sending AUDUSD towards 0.7300 and higher.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation
Trade closed: target reached:
Trade closed at 0.7300 after reaching our target
Disclaimer:
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment.
