FX:AUDUSD   Australian Dollar / U.S. Dollar
Hi guys
So today I thought I would do something different and try and give a more detailed analysis for my trading decision rather than just saying “go long” or “go short”. In no way am I suggesting you should buy on my recommendations and just remember trading involves risks. If you do find this helpful please leave a like or even comment on your own opinions or thoughts on how I could improve.

Having a look at the chart the bulls do seem to be in control for the moment and I do believe we could hit or even go further than the previous supply zones around the 0.79 or 0.81 levels. We did hit support at the long term 50% Fibonacci level and have been at an uptrend since then. The AUD has also tested support at the 0.382 Fibonacci level twice which suggests a further bull run. Also I would like to add there is an inverted head and shoulders pattern on the 4 hour chart.

So let’s take a look at the AUD. It is known Australia is rich in resources so the price of commodities plays a big part in the strength of its economy due to exporting. One of the commodities I use to measure the strength of the AUD against the USD is the gold index XAUUSD due to gold being exported to the US in quite a large amount.

Since the threat of war with North Korea (possibly a list of other reasons) Gold has been on an uptrend since late 2015.
Now we can have a look at the AUS200 index to have a bit more of an idea at how the Australian economy is doing as a whole and it does look like we are testing the resistance level at 5967. If the resistance level is broken there is a possibility the AUS200 could test its next resistance level at 6864.

Also lastly and not least we can have a look at the DXY to measure the strength of the USD. The amount of selling pressure at the top of the downtrend channel tells me the bears are still in control and will not allow the USD to break its downtrend channel (at least not yet) due to the 2 inverted hammers pattern although the 92.70 (previous resistance turned support) level will be an interesting level to keep an eye on.

I do understand there is a lot more factors that come into play when it comes to measuring the strength of the AUD (like Chinese trade balances, employment, monetary policies etc.) But these are the main three charts I consider before making trading decisions on the AUD/USD pair.

Thank you for reading and I do hope this analysis has in some way been insightful.

Comments

nice detailed analysis
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