Technical Considerations: -Note that we have broken down from a range that we have been trading in since the end of march after carving out a series of two lower high's as can be seen by the RED trend-line. -Before the drop out of the range we saw a period of ranging consolidation ( dotted range). - Downside breakout crossed the 200 period MA and closed below the line. - RSI downtrend (red line) was respected, reading confirmed on the Stochastic RSI.
Fundamentally speaking, we have seen the Aussie dollar behaving very resiliently in the face of US strength across other currencies, managing to stay in this range whilst the EURO and JPY have seemingly caved in. Could we be seeing a delayed reaction?
Employment data comes out today in Australia. Positive numbers may drive this pair back into the range (or at least a re test) where as poor news out of Australia may well prompt traders to jump on board the breakout.
Jobless claims come out later in the USA with a small decrease in initial jobless claims expected. As we know, labour force improvement being one of the major drivers for the US at the moment, Positive news here could further add downward pressure to the move.
Just my thoughts to aid my trade strategy here.
currently entered short on a breakout order triggered when price dropped below range resistance / MA Cross). - SL tight to be ready for potential rebound given Australian fundamental data. Target 1 around the .89 mark.
Given strong AUD data and bad employment data later on tonight we may be in a good position to enter long as we head for a retest of the declining red trend-line..
Comments
Gino
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Well, Aus numbers came out very good, shut up towards .92, any new thoughts?
Technician
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Very strong numbers indeed, but as long as the pair maintains the break below 0.9200 we should take any rally with a grain of salt.
Technician
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0.9200-0.9235
Gino
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Not familiar with the expression :-)?
grain of salt.
Technician
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:), from Wikipedia : "(With) a grain of salt," (or "a pinch of salt") is an idiom which means to view something with skepticism
Sitrade
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Exactly as the Technician has stated below. I think that if we stay above the .92 mark and the US comes out with more mixed labour data then we (I) will be back into range trading mode however some good US news will provide a failed retest and present some good opportunity for shorting..
Technician
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But i think the AUD is going to be more resilient int he upcoming period.
Gino
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Boy the Aud showed no sign of resiliency ;-).
Technician
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At all :). Anyway, its moving in my favor, which is a good thing.
Sitrade
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Well, We got some positive labour data in Australia and looks like AUD is rebounding to the upside. Lets see whether this move can sustain this move into tonight's jobless claims.