AUD/USD 2nd Trade Idea

AUD/USD 2nd Trade Idea

4 May 2016, 08:49
Roberto Jacobs

AUD/USD 2nd Trade Idea

Overall AUD/USD bottoms 0.7004, 0.6920, 0.6918, 0.6855. Glenn Stevens a most talented and respected central banker in my estimation stated many times over the years in his complaints regarding AUD prices is he would like to see AUD/USD 0.6500 - 0.6400 but in line with AUD lower Commodity prices. Now view the bottoms and 500 point distances then ask why cut OCR now.

The reasons are many. OCR has been in overbought territory for a long long time and this overbought development failed to see an acceptable level in AUD exchange rates. Secondly, since the free float, May, April and November were most popular months to change OCR. The third reason is generally, AUD annual budgets are coming usually in July. April and May are popular months as budgets approach. November is almost half years in budgets but certain months are throw aways as the RBA doesn't want to signal a pattern in case the market begins a pile on trade to severely wack out the exchange rate to unacceptable levels.

Two ongoing factors applied to AUD over the years and it involves its on again, off again correlation to EUR/USD. The correlation currently is a robust 94% inside a more robust r squared. So 0.7700 as the OCR cut time is as good a level as any particularly when EUR/USD is on the verge of either an enormous break higher or severe drop lower.

The second factor is the AUD system. Its a protective yet benchmarked system as the matrix was built upon protections bench marked by further protections. This bench mark system guards AUD especially in times of world troubles when protections become the lazer focus insight. Yet AUD is a true market system and stems from its 200 year market tradition, a tradition that allowed Australia to fight the good fight to become a dominant nation as it is today. A 20 page AUD history dating to its founding by Captain James Cook to present day was written and exist in print for interested.

New Bottom. 0.7457, Ranges above 0.7545, 0.7719, 0.7834. Ranges below 0.7445, 0.7276. In days ahead, we will see the point 0.7445 emerge as a big break point.

Target 0.7519 and Failure point 0.7502. Trade Able points on the way up, 0.7498, 0.7502, 0.7507, 0.7512, 0.7515, 0.7519 target.

Shorts below 0.7493, target 0.7485, 0.7481 and 0.7457 Bottom.

Note the closeness of levels and targets. Maximum ranges are 35 and 26 pips while low pip ranges are found at 13 pips.


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