- The focus next week is FOMC Minutes on Wednesday. This is the last Minutes of the year before Xmas holiday, and decisions of FED will orient the greenback move next month.
Last week, we saw a sell-off AUD , A/U lost 0.9000 benchmark. This is a key support, if this support is broken, A/U will lower. RBA told that they felt uncomfortable with high currency, they will intervene to weaken AUD, and the level they want is 085. Please refer: http://www.fxstreet.com/news/forex-news/article.aspx?storyid=76956d4e-3756-45c5-9690-f5dc0a9d334c
This is fair-value which RBA want. Thus, in the long term, the trend of AUD is .
Come back FOMC Minutes:
I have two choices on the table now:
- 1 FED taper
-2 FED no taper
I consider each choice and its affect on AUDUSD to give strategy for next week:
- The first choice- FED taper
No matter what FED choose taper 10 billion or 20 billion, US Dollar absolutely higher than major currencies, and AUDUSD is not exception.
---- AUDUSD trend is a strong .
- The second choice- FED no taper.
Everything unchange. What happen before, now continue happen. It means nothing special. the same situation.
What happen to A/U before ?. that is AUDUSD fell down.
In both cases, AUDUSD also fall down, but the degree of sell-off A/U is different.
- Taper: Strong sell-off
- No Taper: Sell-off but not too strong.
- Look at on the chart, I can see the correction of A/U respect 38.2% Fib retracement and it will happen now.
The next 38.2% Fib retracement coincide 0.9000 key level, so I believe A/U will test this level and then fall down.
If FED no taper: A/U might test 0.9116 and then fall down to the past low : 0.8846
If FED taper :A/U might test 0.9000 and then fall down to the past low: 0.8846
In both case, I believe A/U will touch 0.8846 low.
Thus, trader can SELL at 0.9000. Target: 0.8846 Stop Loss at 0.9126
Or trader can SELL now , target 0.8846, Stop Loss 0.9190 or Stop Loss at 0.9126 for safe if you don't care FOMC Minutes.
In my opinion, I choose : FED no taper. They will do in March. Hence, I will SELL at 0.9000/0.8990, Target: 0.8846, Stop Loss at 0.9126.
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