AUD/USD Limit Buy at 0.9208

November 9, 2009 - 6:18 am by Forex District · 6014Leave a CommentAUD%2FUSD+Limit+Buy+at+0.92082009-11-09+11%3A18%3A23Forex+District

The Aussie advanced on renewed risk appetite, as the Dollar is being sold across the board, and positive economic data.

Home loans in Australia rose by 5.1% in September, from -1.9% in August, beating estimates of 3.0%. This was the strongest reading in over 6 months.

Higher interest rate differentials and a positive outlook for further rate increases should continue to support the currency.

Ahead, no major data will be released in the NY session where traders will take focus on stock market performance for near term guidance.

Looking at the 4hour chart, AUD/USD found strong demand at 0.9150 area, where gains extended to a current 0.9293 high.

Although higher prices are expected, a retracement from these levels is possible as it reaches a strong resistance level that was able to hold through October. 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 (0.9285), 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 @ 0.9208 Targets: T1 0.9228 – T2 0.9420 Risk: 0.9148
* 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.