AUD/USD Range-Bound 0.9188 – 0.9300
October 26, 2009 - 4:50 am by Forex District · Leave a Comment
The Aussie trades range-bound as mixed economic data and shifts in risk sentiment have muted price action. Despite equities ending sharply lower Friday, commodities and currency markets consolidate.
Even if a correction ensues, the AUD/USD will continue to be the pair of choice and investors will look to reenter at lower levels. Current price action sees the Aussie retracing further but won’t be surprised if higher prices continue.
Looking at the 4hour chart, AUD/USD trades near the 0.9250 area, above the 91.87 where demand continues to be registered, mid-point of its range between the 0.9300 and the 0.9200 levels.
Although higher prices are possible, the pair found strong supply above the 0.9300 area, suggesting consolidation may take place before longs realign.
From current levels (0.9243), AUD/USD will encounter initial support at 0.9186 (61.8% Fib 0.9115 to 0.9300), followed by 0.9120 and 0.9040 (38.2% Fib 0.8594 to 0.9311).
Initial resistance can be seen at the 0.9288, followed by 0.9345 and 0.9390.
The long term bias for the pair remains bullish and support for the Aussie should continue and parity within a few months is expected. Rate differentials are starting to play a big role in currency markets.
Trading levels in play:
Muted price action. There are no solid trade recommendations at the moment for intraday moves. However, look for possible buy setups if prices decline further.
Limit Buy @ 0.9120 Targets: T1 0.9142 – T2 0.9269 Risk: 0.9070
* 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.
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