Is Now Time to Buy Australian Dollar?

[pamegafx]

Hi María here. I am glad to be here with you sharing this great analysis hope it will help you.

Is Now Time to Buy Australian Dollar?

The Australian Dollar has fallen sharply off of its $1.0610 peak seen through August, but does the 400+ pip decline offer a buying opportunity?

Argument for Australian Dollar Short Positions:

• Overnight economic data shows the Australian economy failed to accelerate, pointing to downside risks for the Australian Dollar itself.

• Our weekly trading forecast shows Australian Dollar is at clear risk as futures positioning remains extremely one-sided

• Australian Dollar may have topped amidst clear market complacency

Argument for Australian Dollar Long Positions:

• The Reserve Bank of Australia boosted the AUDUSD as it kept interest rates unchanged, giving hope that the Aussie currency would maintain its substantial interest rate advantage versus major counterparts.

• Highly-correlated Gold and Silver prices have broken key technical resistance, offering AUD support.

• Key Fibonacci support may offer an important AUD price floor at $1.0100

Conclusion:

Substantial Australian Dollar declines offer an attractive price at which to get long, but traders should be careful of clear fundamental risks to the AUDUSD currency.

Proprietary Speculative Sentiment Index data likewise shows that the vast majority of retail traders have gotten long the AUDUSD amidst one-sided price moves. There are currently 2.2 traders long Aussie Dollar for every one that is short—a level that has historically coincided with further AUDUSD weakness.

Reward/risk on AUDUSD longs looks attractive, but we can’t advocate joining the retail trading crowd in getting long the fast-falling Australian Dollar.

— Written by David Rodriguez,

Have a nice day!

María

[Balazs]

Hi There!

In my opinion; as long as there is no strong indication of a reversal, I wont be eager to buy the AUD.
Fundamentals may support the bulls, but from a Technical perspective, I don’t see a reason to enter with a long position unless you are about to catch a swing.

Best Regards;
Balazs

[bobmaninc]

Balazs there is not really any strong fundamentals to suggest a long either. Only thing out there is lnterest rates remain “unchanged” and yeah it may not show weakness but it really does not show strength. It really show nothing

[Balazs]

I’d say that it’s more likely that the bearish move will remain in motion. With the 21/55 EMA is about to cross, supported by increasing negative momentum I’d rather sell this pair. The Stoch is in the oversold zone, that’s why I wouldn’t be surprised to see a swing toward the upper trendline but apart from that, I don’t see many reason to go long.
Of course, it’s just my humble opinion.

Best Regards;
Balazs

[dudest]

IMHO, the AUDUSD is at a key S/R (now support).
I think what we’re seeing may just be a pullback before the strong down-move continues
I will thus be looking for price action clues for short entries on the H4

Cheers

[lwchiet]

May I know will QE3 reduce the value of US dollar and increase the AUD?

[Ashraf_sherif]

dudest … i liked ur analys