Australian Dollar reached new highs fresh today, breaking 0.94 resistance and hit as high as 0.944, the highest level since 19 November 2013. the reason for this strong uptrend is simple - 2 positive economic news in the form of higher than expected inflation expectations to consumption and an unexpected decline in the unemployment rate 6.1% to 5.8%. The combine the upward impact of these new 2 allowed prices to remain above 0.94, although the latest Chinese data have proved disappointing once again - Trade balance improved from a deficit of 23 billion $ a $ 7.71 billion surplus, but that is only made possible due to a huge drop in exports: -11.3% growth vs. 2.4% expected. This huge drop in imports is bound to hit hard as China is Australia's largest export destination for products made in Australia. from China in exports also fell sharply, suggesting that not only China does not buy, the world is not so hot either.
However, it should be noted that employment data are not as bullish as it seems either. The overall figure showed an increase of 18.1K jobs, but the number of full-time positions decreased by 18.1K, while part-time employment increased by 40.2K. Certainly this is not the worst numbers as possible, but it takes the gloss off significant 0.3% decline in the unemployment rate, especially if we take into account that the participation rate also declined.
Time Table
is what it means AUD / USD should be less optimistic? Absolutely not. bullish momentum was already evident at the beginning of Tuesday, when prices broke above 0.93 and bulls have not looked back since. Given the strong bullish momentum, it is likely that prices may go higher even without the 2 bullish economic news releases today. As such, the probability of 0.94 retaining support is high even if Bottom Canal would have been a viable downside target we will bounce off channel top right now. stochastic indicator suggests that a bear market is at stake right now, but it should be noted that the curve is flattening Stoch head of the "support" level around 60.0. Therefore, it will not be surprising to see Stochastic reverse curve and by denying the bear market signal. It would also mean that prices can push up towards the Top channel once again, with the possibility of an upward breakout or price may overlap Channel High upper to bring us again to new highs.
Table Daily
Daily Chart is not as optimistic, as the decline in October 2013 is still visible on the horizon . Therefore, it is difficult to imagine the current bullish momentum gain a lot of progress with a broad long-term downtrend breathing down his neck. Moreover, the downward trend in the long term are not without justification - Mining of Australia begins to slow, as the US economy recovers. It would naturally bring AUD / USD down before you even start talking actions of the Central Bank. Whereas the fundamentals remain essentially the same, we can interpret current recovery as a simple correction. stochastic indicator is overbought so promote bearish correction move forward
Links:
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This article is only for general information purposes. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
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