AUDUSD has been trading inside a 300-400 pips range from last several days, and currently getting close to the higher end of the range as shown in the 4 hour chart below. I think the pair can move lower again from the levels such as 0.9300 and 0.9310. We will look forward to sell AUDUSD in short term for at least 50-100 pips gain. RSI and Stochastic are already retreating from the extreme, and we also have a beautiful divergence on the 4 hour chart.
There are two ways to enter into a sell trade for AUDUSD. First, enter from the top of the range with a bearish candle pattern on the 1 hour chart. Secondly, there is a trend line on the 1 hour chart as shown below. Once the pair breaks and closes below the trend line and the closest support, then we can enter into a sell trade.
Initial target would be the critical support at around 0.9120 as plotted on the chart below, and final target would be the opposite band of the Bollinger. Stop would be kept tight as we are playing for the range, and should be placed above the previous high.
Reviewing yesterday’s events and trades
National Federation of Independent Business (NFIB) Small Business Optimism Index released yesterday came just around expectations, and Canadian Housing starts fell to 180.3K from the previous measure of 193.0K. Overall there was no major market moving event yesterday, and most of the major pairs traded inside a narrow range. As a result, there was hardly any interesting opportunity for us to trade, and it was better to stay away from the market in such conditions.
Fundamental Outlook for the day
Just as yesterday, there is no high-risk event scheduled later in the US session. Some of the low-risk events include US wholesale inventories data, Crude Oil inventories data and Gasoline Inventories data, which are likely to have no major impact in the market. However, we do have some critical events lined up in the next Asian session, including RBNZ interest rate decision and Australian employment data. Both can bring in a lot of volatility for NZDUSD and AUDUSD. Both pairs are trading at around important levels, and any spark can cause major moves for the pairs. So, keep an eye on these events if you are trading AUDUSD and NZDUSD.
This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: EURUSD, GBPUSD, NZDJPY, GBPCHF, GOLD, SILVER and DOW JONES.
Get it HERE: Vladimir’s Markets Forecast
Trade carefully friends. Happy trading!
