WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

Today’s Trading Edge: AUD/USD – Rally to Continue but Waiting for the Pullback

Posted by Edward Moya on Mar 28, 2014 8:38:00 AM

WWM AUDUSD MAR 28 2014

The bullish extension on Aussie dollar that I targeted on March 13th not only reached the .9200 handle, but extra momentum took it almost to .9300 as expectations grow that the Chinese will announce stimulus measures and that Governor Glenn Stephens appears content with the improvement in the weakening Australian dollar.  For the most part, the central bank has touted a preference to see the exchange rate closer to .8500.   

Big Technical Picture

The record run from the 2008 low of .5967 to the 2011 high of 1.1079 has the key 50.0% Fibonacci retracement level holding at .8523.  The range that may remain intact for 2014 very well could be the .8500 to .9500 zone. 

Ripe for a Pullback

The daily chart shows that the inverted head-and-shoulders pattern was valid and that AUD/USD may remain bid after a solid round of profit-taking that may be triggered by the bearish butterfly pattern highlighted in gray.   

Current Bias

Price is likely to rise again to maintain a bullish bias that may target the .9500 level.  If the current downside momentum breaks below .9100, a stronger correction may see a move towards .8900.   

The trade: Buy AUD/USD at .9175 with a stop loss at .9125 and a take profit at .9300.  The Risk/Reward Ratio is just under 1 : 2.5 

Edward J. Moya

Technical Strategist

WorldWideMarkets Online Trading

 

Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

FAQ CenterLEARN MORE >>
Browse our frequently asked questions and find your answers right away.

VideosLEARN MORE >>
Access to the educational lessons, webinars and platform walkthroughs.

READY TO TRY THE MARKETS?

Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!