AUD/USD Limit Buy at 0.9188

November 10, 2009 - 6:07 am by Forex District · 6075Leave a CommentAUD%2FUSD+Limit+Buy+at+0.91882009-11-10+11%3A07%3A41Forex+District

The Aussie stalled at the Oct. 21 high as supply was met and investors locked some profits on mild risk appetite.

Comments from Fitch Ratings dampened demand slightly, for higher yielding assets, as investors worry over government finances.

Ahead, no major data is expected in the NY session, however, in the Asia session Aussie traders will be attentive over China’s economic news.

Markets expect the industrial production and CPI readings, as well as trade balance figures. Data will be important as investors reassess the state of the Chinese economy.

Meanwhile, traders will monitor stock market performance for near term guidance.

Looking at the 4hour chart, AUD/USD found supply at 0.9325 (Oct. 21 high), where sellers extended moves to the 0.9255 support.

Although a break above the 2009 high is expected, a retracement from these levels is possible as strong resistance may hold for now. If a retracement ensues, renewed buying interest should resume at lower levels, subject to equities. A preferred near term strategy looks to buy on dips.

From current levels (0.9290), AUD/USD will encounter initial support at 0.9241, followed by 0.9207 and 0.9150.

Initial resistance can be seen at 0.9313, followed by 0.9365 and 0.9420.

Despite any near term moves, the long term bias for the pair remains bullish and support for the Aussie should continue and parity within a few months is still expected. Rate differentials are starting to play a big role in currency markets.

Trading levels in play:

Limit Buy @ 0.9188 Targets: T1 0.9208 – T2 0.9420 Risk: 0.9138
* After 15 pips profit move stop to entry, take profit at will. Trade is canceled if it rebounds near entry and moves higher by 20 pips. Will follow up with comments if outlook changes.