Where is the Australian dollar going next?
As the Australian unemployment rate has hit a decade high of 6.3% this morning in Asian trading, the country's economy created 42,700 jobs against an expectation predicting about 17,000. Despite this all the pair managed to do is revisit the highs around 0.8370 and present a put buying opportunity for vigilant traders.
The main question in the AUD/USD pair is the usual one - where are we going next? While several bulls on the pair have been expecting it to hold above 0.8300 in the near term, we are still seeing the Australian dollar underperforming across the board, primarily due to concern about China.
The case is no longer compelling to go long on the AUD/USD, but we have to note here that some big analysts are calling the bottom in this binary options forex pair. Morgan Stanley has announced yesterday that they are entering into a long position from 0.8300, targeting 0.8500.
At the same time , the high jobless rate reported this morning is reinforcing the views of the market that further interest rate cuts are coming to the table as the Reserve Bank of Australia takes the opportunity to do just that in 2015.
Looking at the charts we are seeing two scenarios unfolding. The obvious one os for consolidation. We are currently trading around 0.8320 and the rate seems slowly ticking lower. The double top formation around 0.8370 is weighing on the price, but if that level is broken, we can clearly see the AUD/USD going higher and will purchase daily calls for the 20:00 GMT expiry.
On the other hand if the pair remains at current low levels there is little scope to believe that another test to the downside can occur. At this juncture we see the support around the round figure at 0.8300 as key and are keenly looking forward to see if the AUD/USD tests it today. If the price manages to close below it, we would be buying daily puts.