By: Christopher Lewis
The AUD/USD pair has been falling over the last several weeks and with alarming steadiness for those of us that have been bullish. The pair has a natural tendency to mimic the overall “risk appetite” around the world, and is the first pair that many traders turn to in order to express either a bullish or bearish view on the global economic outlook. Because of this, you should always keep an eye on this pair.
The recent action seems to be a “questioning” of all things growth related, and will certainly be affected by the Federal Reserve’s minutes being released later today. If there are hints of more quantitative easing, the pair will more than likely strengthen. The Chinese economy will also be an important factor in this pair as well as the Aussie sell so much of their commodities to China.
As a very important side note – the RBA has a rate announcement later today. This pair looks ready to move.
Channel, 200 EMA, Fibonacci, and 1.04
The rate decision is a big deal. However, we also have to look at the 200 day EMA being just below current prices, and showing support. On top of that, the 1.04 level look to be holding finally. The level was once the site of a breakout from an ascending triangle that started the most recent bullish move.
The 50% Fibonacci level is just below the 1.04 level, and the pair certainly looks ready to do something. The descending channel that is on the chart is a minor concern for the bulls, but a concern none the less. With this being said, the RBA announcement will more than likely be the catalyst for a breakout above or below the current levels.
.png "AUD/USD Daily 4/3/12")
The breaking out of the channel is a very bullish sign, and I would be long at that point. The breaking of the top of the hammer for the session is also a bullish sign as well. Because of this, we could actually see two separate entry points. On the other side, a brake below the 1.03 handle has me selling and aiming for a target in the parity range.