Last week, we saw a sharp drop of Non-Farm Payroll.This caused a big surprise due to all people also thought that it would be positive and benefit for US economy as well as FED taper decision.
Could the advance of US dollar halt ?. In my opinion, it's too soon to conclude that, we need more evidences. Economic data this week will clear everything.
Economic report this week:
- US Retail Sales on Tuesday
- US CPI on Thursday.
- Australia Rate on Wednesday.
All forecast is just relative. I think US Retail Sales is positive because last holiday, American go shopping quite strong.
I expect US CPI is 1.4% as Consensus but still below 2% target. FED need more action to darg US CPI reaches 2% target.
The downtrend of AUD is supported by the of GOLD and dovish stance of RBA.
The trend of GOLD in the being time is uptrend. I think most likely AUDUSD will retrace after a sharp decline.
The problem is what is the level they will retrace ?.
Last month, A/U moved in the range between 0.882 and 0.895
Now, the 0.895 was broken, so A/U would consolidate in the new range : 0.89 and 0.90
The current level: 0.90 is a strong , but I think it's not strong enough to hold A/U below it if market provides some enough strong data such as NFP last week.
However, 0.9050 is a very strong resistance level: Enough strong because it's 23.6% Fib level of peak 0.9757 and bottom 0.88467
Thus, A/U will be trade below 0.9050 level in next weeks.
I will open a short term position: SHORT A/U : Target: 0.89475 Stop Loss at 0.9050 47 pips from current price.