FxWirePro: AUD/USD Upside Capped Below Daily Cloud, Some Consolidation Likely Before Next Move

FxWirePro: AUD/USD Upside Capped Below Daily Cloud, Some Consolidation Likely Before Next Move

8 June 2016, 07:34
Roberto Jacobs
0
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FxWirePro: AUD/USD Upside Capped Below Daily Cloud, Some Consolidation Likely Before Next Move

  • AUD/USD trades modestly flat on the day, likely to consolidate gains of the previous session. 
  • The pair spiked to hit fresh five-week highs of 0.7463 on Tuesday after RBA stood pat, but saw a corrective slide early today. 
  • Pair found fresh bids at lows near 0.7430 after positive Chinese imports and exports data. 
  • The Chinese imports data revealed a smaller than expected drop in the imports, which suggests Chinese domestic demand is slowly picking-up.  
  • RBA’s status-quo stance combined with higher oil prices underpins the sentiment around the AUD. 
  • On the charts we see stiff resistance by 50-DMA at 0.7468 and cloud base at 0.7472. Break above needed for further upside. 
  • Above 0.7472, the pair finds its next hurdle at 0.7488 (50% Fib of  0.7835 to 0.7145 fall) and then 0.7570 (61.8% Fib). 
  • Break below 0.74 can drag the pair to 0.7360 and then 0.73 levels. 
  • Next in focus remains the US labour data due later in the NA session ahead of the Chinese CPI data lined up for release tomorrow. 
  • We expect some consolidation at current levels. Our previous call (http://www.econotimes.com/FxWirePro-AUD-USD-breaks-above-200-DMA-good-to-buy-dips-217575) has achieved all targets.

Recommendation: Book full profits. Enter fresh longs on break above 0.7475, target 0.7570 

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