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AUD/USD Forecast 04 Apr 2014

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AUD/USD Chart 04 Apr 2014
Average: 5 (2 votes)

The Australian dollar holds its ground

The Australian dollar has proven to be one of the strongest currencies across the board in recent sessions, as the first quarter mighty Euro and British pound are failing to attract bids in recent sessions. We are admiring the way the Australian currency is holding up and think that it will be prudent to invest in it by buying calls for Friday expiry.

The main challenge for the Australian currency will be the release of much higher than expected non-farm payrolls. The risks for a substantially stronger than expected report are remote, but nevertheless there are always some. There is no time to waste for us - we are buying daily calls for Friday expiry at current levels at 0.9230.

Our prognosis relies on the fact that the Australian dollar has held up rather well despite lower than expected Retail Sales data and complete ignorance over recent developments surrounding the Chinese economy. The pair has been consolidating throughout the better part of the day. that however should not deter risk appetite, as we will have a big day tomorrow.

The rate probed below 0.9210 in the aftermath of lower than expected retail sales from the country. That however did not prove to be a break, and the prices of this binary options forex pair have rebounded towards the 0.9240 area. Once there, another batch of selling ensued, leaving bulls disappointed, but by no means crushed.

After dipping into the 0.9215 area, the pair has recovered to currently consolidate around 0.9230. The main takeaway that can be taken from the chart is the line that we have painted in blue remains in play. It will take only a materially lower close below 0.9210 to reverse the positive sentiment that has engulfed the Australian dollar.

On the upside, the first major hurdle is a probe above 0.9255-60 area - should it happen there is no doubt as to where the pair is heading next - the round figure are 0.93 will be tested yet again before we see any attempt for a meaningful pullback.

An alternative scenario to our daily call option would materialize only if we see a sustained hourly break below 0.92 - that will unleash a round of stops which could prove to hold the key to 0.9150.

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