AUD/USD provides an opportunity for a long position: it’s consolidating around the 0.65 mark, and with the rise in gold prices, it can reach 0.6650 soon, and push towards higher targets afterwards. Let’s look at technicals and fundamentals.
The Australian economy is doing much better than other economies in the west. Growth, unemployment and interest rate values are better than the US, Britain, Europe, Japan, Switzerland and Canada. Only New Zealand has a higher interest rate at the moment.
Gold prices are on the rise: Gold currently trades at 943 dollars, rising 7% from the beginning. Solid gold makes gains since money become printed – devalued – Obama’s Stimulus Package devalues money.
There’s a strong correlation between AUD/USD and Gold.
In the short term, AUD/USD is consolidating today around 0.65. It currently trades at 0.6487.
The close term target is 0.6650, which was the high value on Friday. The next target is 0.685, which was the high value on Monday last week.
Looking further up, the next point is 0.7267, which was the high on January 7th.
And where is the Stop Loss point?
For those who prefer playing it safe, 0.6405 is the first stop. It is 25 pips below the lowest point in the last week – 0.6430.
If you want to deepen the stop loss point, 0.6220 is 28 pips below the lowest point in 2 months. 0.6448 was reached on February 2nd, and before that in December 8th.
What to look out for this week?
Looking at the forex weekly outlook, there are a few economic releases that can shake the Aussie. Tomorrow, on Tuesday, the Monetary Policy Meeting Minutes will be released in Australia. This can show that Australia still has a resilient economy.
Later this week, data from America will dominate the direction of the market. Note the Building Permits on Wednesday, and the CPI on Friday.
More recent news about this currency pair, at James Chen’s interesting post.
I’ll follow AUD/USD throughout the week…