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AUD/USD Yearning for a Push to the Upside… (Trade of the Day)

Now that the “elephant in the room” has been addressed – the Fed has put it out there that they are ready to do what it takes to maintain the current growth expansion. To put plainly, the market should expect significant easing tools should growth indicators start to sustainably depreciate: this is a very dovish statement from the Fed in summary. The USD on that front started to depreciate as we mentioned in this report. The Aussie, on the other hand, is starting show some relief (rally) after a tumultuous half-hear – this could be attributed to recent tilt of the RBA from uber-dovish to somewhat neutral on their monetary policy stance. Additionally, should US-China trade war deescalate further, the AUD is poised to garner significant bullish momentum. The combination of these sets the AUD/USD for a buy at least on the short term.

Technically, the price has printed an “Inverse Head and Shoulders” pattern with price currently trading above the neckline of this reversal pattern (see H1 Chart).

Fig 1: Hourly (H1) AUD/USD Chart

 

 

AUD/USD

Buy @ current market price (instant execution)

Stop: 0.6850

Limit: 0.6990

The alternative risk is Australia’s exposure to the Chinese economy and for instance, there is a fallout between President Trump and Xi of China in the G20 summit, a resultant escalation would mostly drag the Aussie lower. Hence, clients are advised to always use a stop loss.

 

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