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Aussie in three-week Peak

Market Analysis


The dollar has perked up slightly going into the N.Y. open, after printing trend lows versus the euro ahead of what turned out to be stronger than expected Ifo data out of Germany. USDJPY is off its four-session low of 110.87, though remains capped under its 50-day moving average of 111.35. USDCAD meanwhile traded under its 50-day moving average at 1.3483, printing one-month lows of 1.3457. The New Zealand dollar also touched a one-month high versus the greenback, and the Australian dollar a three-week peak.

More precisely, AUDUSD traded under its 200-day moving, however it seems extending its enlargement since May 10, further up by breaking earlier the 50-Day EMA and also the significant 0.7500 key level. During the day, the pair manage to break the upper Bollinger bands, in the 4-hour chart. In a Daily timeframe RSI is at 57 looking up towards oversold territory, however it needs a lot of positive upwards momentum to reach that level. Hence a Long position was taken with entry at 0.7504, with Parabolic SAR remain positive for the last two weeks. Target 1 was set at 0.7540, which is the 38.2 Fibonacci level but also the confluence of 200-Day moving average. Target 2 at 0.7580, based on ATR(14). Support at 0.7450.

For the rest of the day, the economic calendar features April new home sales, which are expected to slip to 0.595 mln from 0.621 mln previously. Flash May Markit manufacturing and services PMIs, along with the May Richmond Fed index are on tap as well, with the latter seen falling to 15 from 20 in April.

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Andria Pichidi

Market Analyst


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