By: Christopher Lewis
The AUD/USD pair is without a doubt one of the favorites for the trading community to express a bullish view on global growth, with an emphasis on Asia. The Chinese economy can have an effect on the value of the Aussie dollar, as the Australians export so much to that country. Lately there have been concerns about a slowdown in that area, and as a result the Aussie has been a bit soft.
The pair also tends to follow the commodity markets as well, and the gold market in particular. Lately we have seen a serious breakdown in the gold markets, and this will certainly have hurt the value of the Aussie. The pair is a nice barometer of the attitude of the markets, and as a result can often lead other risk sensitive markets in letting people know about the nature of the overall markets for the day.
Channel and 50%
The pair has recently broke down below the 200 day EMA, signaling further weakness. The pair also has been in a nicely formed downward channel, and this should continue to influence price. The pair certainly is a mix of both bullishness and bearishness. The pair looks weak at the moment, but the larger picture looks like we are finding support.
The 1.03 level is the 50% Fibonacci level from the most recent uptrend, and because of this I am watching this pair. However, there are a few things to consider before buying this pair first. For example, the candle itself on Friday is a bit of a shooting star, albeit a positive one. The 200 day EMA will attract trend traders into selling this pair, and the downtrend channel as well. Because of this, I have an interest in buying this pair – but I will need to see a few things overcome first.
.png "AUD/USD Daily 4/9/12")
The signal to buy for me is a break of the 200 day EMA, and the top of the channel. This would have us buying at about the 1.04 level at this point. The daily close above that would have me long. As for selling, I see far too many little clusters of support below to get involved until sub-parities.