Did The Aussie U turn?

The comeback of risk appetite pushed the Australian dollar close to yearly highs. As green shoots are showing across the global economy and growth forecast are being upgraded traders are willing to take up more risk and are dumping the safe heaven like the US dollar again like the Aussie which holds higher interest. The fact that a complete majority of the companies earning reports hit analyst expectation is supporting almost two weeks of consecutive green closes when last night the Dow crossed the 9000 level for the first time since January. This might trigger some natural take profits by cautious traders who enjoyed the rally and hence put a halt on the Aussie ascent.

Technical perspective:

The prices failed to create a new high in the current rally edging at 0.8230 lower than the previous high at 0.8270. Should we see a drop below 0.8050 we will have a bearish triple top formation that might encourage further sales on the pair.

The MA’s of 20 and 50 days which gave good indication for the start of the rally are not yet confirming its end , the 20 days is approaching the 50 days but no clear bearish cross had occurred yet. If the 50 and 20 days moving averages will make a bearish cross fresh sells might be trigger.

The momentum is still pointing upward but the RSI is neutral and the MACD is showing signs of shifting back to a bearish direction. The histogram in the MACD is flat and fails to reach higher, the fast moving average started to turn toward the slow one.

Market strategy:

On the buy position targets are set towards the 0.8250/0.8270 and should we have a break higher will aim for the 0.8385 resistance (61.8% Fibonacci). Since this morning the prices came back to trade below the 00.8170 resistance, buying interest might come around 0.81/0.8050, stops on long position are located around 0.7910.

Selling strategies are set from the levels of 0.8170/0.8250 with stops around 0.8365, a break of the 0.81/0.8050 support level might trigger further sells, target are set toward 0.7990, 0.7880 and 0.7750.

Finotec Group Inc.

http://www.finotec.com/

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