5 Aug 2015

AUSSIE TRADING AT A MAJOR LEVEL

AUD/USD WEEKLY

The rate is currently testing a major 14-year rising trendline support around r 0.7200 level. This level also coincides with 61.8% retracement for the whole uptrend. With the most recent RBA rate decision statement being more on the neutral side (compared with the dovish tone for the past year), it is an interesting idea, that the rate may be working on a major bottom.

AUD/USD H4

The shorter term charts show that the rate has made an upside break from the most recent consolidation range just above the major trendline support. As it already has tested the old resistance as the new support, my immediate bias is now higher, with a potential target at 0.7500 - a falling gap resistance and a major psychological level.

A break back below 0.7350 would invalidate my bullish bias and should take the rate back to the previous range lows at 0.7250.

It may be a good idea to open a small long position and to scale in, if the rate can close above the 0.7500 level, however, it is important to remember that it's the NFP week, which is almost a guaranty for a high volatility period during the important news.

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