• 1 day The Gold Rally Has Finally Run Out Of Steam
  • 1 day Citibank Analyst Predicts $300k Bitcoin By End Of 2021
  • 4 days Bitcoin Lives Up To Its Safe Haven Status In A Big Way
  • 4 days 14 Million People Will Lose Unemployment Benefits On December 31st
  • 6 days Why 12 Million American Millionaires Isn’t Good News
  • 7 days Big Oil Is Paying The Price For Investing In Renewables
  • 8 days The Banking Industry’s $35 Billion Gravy Train Could Disappear
  • 9 days Did Amazon Just Democratize Prescription Drugs?
  • 10 days The Private Space Race Just Got Very Real
  • 12 days Short Sellers Are Willing Big In This Turbulent Market
  • 13 days SpaceX Gets Go-Ahead To Send Humans Into Space
  • 14 days Saudi Arabia Lost $27 Billion In Oil Crash
  • 15 days China’s Big Tech Takes A Hit As Regulators Crack Down
  • 16 days Black Friday Could Be Retailers’ Only Hope
  • 17 days Why You Should Not Dump Your Stay At Home Stocks Just Yet
  • 18 days The Real Reason Why Uber And Lyft Stocks Have Soared Nearly 50%
  • 20 days Bitcoin Heads Towards $16,000 And No One’s Cashing In
  • 21 days Elon Musk’s $250 Tesla Tequila Is Already Sold Out
  • 22 days Will The San Francisco Wealth Tax Spark An Exodus Of The Rich?
  • 23 days The Fin-Tech IPO Of The Century Just Got Crushed
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Nadia Simmons

Nadia Simmons

Nadia is a private investor and trader, dealing in stocks, currencies, and commodities. Using her background in technical analysis, she spends countless hours identifying market…

Contact Author

Przemyslaw Radomski

Przemyslaw Radomski

Przemyslaw Radomski, CFA (PR) is a precious metals investor and analyst who takes advantage of the emotionality on the markets, and invites you to do…

Contact Author

  1. Home
  2. Markets
  3. Other

Forex Trading Alert: AUD/USD - Trend Reversal or Just a Bigger Pullback?

Forex Trading Alert originally published on Apr 27, 2016, 4:22 AM


 

Earlier today, the Australian Bureau of Statistics showed that the consumer price index dropped by 0.2% in the first quarter, missing analysts' forecast. Additionally, consumer prices (year-on-year) rose by 1.3% in the first three months of the year also disappointing expectations. Thanks to these numbers, the Australian dollar declined sharply against the greenback, which pushed AUD/USD under previously-broken important line. Is it enough to trigger further deterioration in the coming days?

In our opinion, the following forex trading positions are justified - summary:

EUR/USD: short (stop-loss order at 1.1512; initial downside target at 1.0572)
GBP/USD: none
USD/JPY: none
USD/CAD: none
USD/CHF: none
AUD/USD: none


EUR/USD

EUR/USD Weekly Chart
Larger Image

EUR/USD Daily Chart
Larger Image

Although EUR/USD gave up some gains yesterday, currency bulls didn't give up and the pair rebounded earlier today. Taking this fact and buy signals into account, we think that what we wrote in our previous alert is up-to-date:

(...) the exchange rate may extend gains and climb to the upper border of the purple declining trend channel in the coming days. Nevertheless, even if we see such price action, sell signals generated by the weekly indicators suggest that further deterioration is just a matter of time.

Very short-term outlook: bearish
Short-term outlook: bearish
MT outlook: mixed with bearish bias
LT outlook: mixed

Trading position (short-term; our opinion): Short positions (with a stop-loss order at 1.1512 and the initial downside target at 1.0572) are justified from the risk/reward perspective.


USD/CHF

USD/CHF Weekly Chart
Larger Image

USD/CHF Daily Chart
Larger Image

On the daily chart, we see that USD/CHF extended losses earlier today, which in combination with the current position of the indicators (sell signals remain in play) suggests that lower values of the exchange rate are still very likely. If this is the case and the pair declines further, the initial downside target would be around 0.9670, where the green support line (marked on the weekly chart) currently is.

Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective at the moment.


AUD/USD

AUD/USD Weekly Chart
Larger Image

Looking at the weekly chart, we see that AUD/USD extended losses this week, which resulted in a drop not only below previous highs, but also under the upper border of the rising purple trend channel. Although this is a negative signal, it would change into bearish only if the exchange rate closes the week below this important line.

Will we see such price action? Let's examine the daily chart and look for more clues about future moves.

AUD/USD Daily Chart
Larger Image

On Monday, we wrote the following:

(...) the pair dropped under the lower border of the consolidation, which in combination with sell signals generated by the indicators suggests further deterioration. If this is the case, the initial downside target would be around 0.7597, where the 23.6% Fibonacci retracement (based on the entire Jan-Apr rally) is.

From today's point of view, we see that the situation developed in line with the above scenario and AUD/USD declined sharply earlier today. With this move, the pair approached our downside target, however, there are no buy signals that could encourage currency bulls to act, which suggests that we may see a test of the blue support line based on the previous lows in the coming day(s).

Very short-term outlook: bearish
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective at the moment.

Thank you.

 

Back to homepage

Leave a comment

Leave a comment