We would like to draw your attention to AUD/USD currency pair on the H4 chart. US financial markets were closed yesterday in observance of Presidents’ Day. Today the trading is performed on a regular basis, but there is no special US macroeconomic statistics released today. Monetary policy meeting minutes were published early this morning by the Reserve Bank of Australia (RBA). We deem that no significant information was announced; anyway this was precisely what has pushed the Aussie higher. According to previous surveys, more than 60% of investors expected the RBA to cut again the rate to 2% at the next meeting scheduled on the third of March. In our opinion, it is now difficult to state certainly whether it happens or not. Especially that the most important Australian economic data will be released only on the second of March, just before the RBA meeting, and before that less significant statistics will be published. The lower the probability of a rate cut, the more chances has the Australian dollar to strengthen.
The AUD/USD was confident enough moving higher on the H4 chart and leaving the triangle. After that, there was a slight pullback and early this morning quite a noticeable white candlestick was formed. As we can observe, the triangle leaving takes place within the bullish channel. We believe this confirms trend. The bullish divergence is observed on the RSI-Bars chart: it was observed almost all the time until the price formed a triangle. Note also that the RSI-Bars last bar hasn’t deepened lower than 50. This is a good bullish sign which means the strengthening of the Australian dollar. Further development of the bullish momentum is not ruled out after the fractal resistance breakout at 0.7815. This mark can be used for placing a pending buy order. Stop loss may be placed at the last Parabolic signal, which can currently act as a support line – 0.7726. After pending order activation, Stop loss is to be moved every four hours near the next fractal low, following Parabolic values. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets Stop loss level without reaching the order, we recommend canceling the position: market sustains internal changes that were not considered.
|Buy stop||above 0.7815|
|Stop loss||below 0.7726|