The Aussie recovered all of its losses from the weaker than expected jobs report as underlining economic indicators remain well positioned. The currency has also been buoyed by a string of better than expected Chinese data which showed clear signals of a global economic recovery.
In addition, China has reiterated it will “absolutely” maintain its stimulative fiscal and monetary policies until a stable economic recovery is achieved. This should add confidence to Aussie investors who feared that global stimulus would start to get withdrawn. Ahead we could experience a possible retracement as investors lock in some profits before adding at lower levels to their longer term positions.
Looking at the 4hour chart, AUD/USD reached an intraday high at 0.8656 where it has rebounded for the a fifth straight time and unable to surpass.A break above this level would open subsequent levels at 0.8691, 0.8731 and 0.8804.
The bias is neutral in the near term but the longer term outlook continues to point for higher prices. At these levels a buying on dips strategy is preferred. Strong support levels to watch lie at 0.8571/40, 0.8500, and 0.8460.
Trading levels in play:
Limit Buy @ 0.8548 Targets: T1 0.8570 – T2 0.8700 Risk: 0.8490
* Good Till NY Close After 15 pips profit move stop to entry, take profit at will. Trade is canceled if it rebounds near entry and moves higher by 20 pips. Will follow up with comments if outlook changes.
Limit Buy @ 0.8460 Targets: T1 0.8498 – T2 0.8700 Risk: 0.8410
* After 15 pips profit move stop to entry, take profit at will. Trade is canceled if it rebounds near entry and moves higher by 20 pips. Will follow up with comments if outlook changes.
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