Sforex
Short

AUDUSD NEXT WEEK: MORE RETRACEMENT TO 0.92 LEVEL.

FX:AUDUSD   Australian Dollar / U.S. Dollar
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- Fundamental Analysis
Aussie is maybe the worst perform currency last week. Negative CPI + bad China PMI sent Aussie to the hell; this is really a strong hit to Aussie, and its effect is to prevent the rally of Aussie. Most forecasters anticipated Australia CPI would reach to 3.2% and cause pressure on RBA, force them to hike rate to stabilize inflation . However, with CPI last week, RBA have more room to breathe, at least I think in next RBA Interest rate decision, they will hold the rate at the current level. In addition, RBA is not only under pressure of inflation but also is under pressure of Abbott’s government. The government clearly disappoints with current level of Aussie. High currency makes difficult for Abbott’s government in deploying economic policies. I think with those difficulties, RBA should keep its neutral stance in the being time and wait upcoming economic data before giving any change in monetary policy .
Next week, there is no economic data from Australia, so market will focus on US data to price AUDUSD .
As I analyze in three parts of EURUSD:
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I expect US economic data would provide fuel to drive A/U to be lower. I know a lot of long term traders are holding a lot of LONG position of A/U to 0.95 level, but I think in the current time, it’s too dangerous to LONG A/U. The rally of A/U from 0.91 to 0.9420 was reinforced strongly by the weakness of USdollar and by risk appetite. Now when bad weather passed, US economy begins to accelerate, the rally of A/U should stop, and the trend should be sideway.
- Technical Analysis
Look at on the chart, 0.92 level is the key level.
Donchian Channels is at that level.
The trend line is also at there.
EMA50 is too.
Below 0.92 level is 0.9160 level.
This is also a strong level.
- SMA200 + SMA50 are at 0.9160 level.
- 38.2% Fib retracement is at that level.
- This is also the level of Gann Square Nine ( very strong )
In the best scene, if US data is so good, A/U would choose 0.9160 level to test.
In the normal scene, I think 0.92 level is the good option.
Currently, I have a SHORT position I opened last week after CPI data released. I will SHORT A/U to 0.92.

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