The Aussie is rebounding strongly from 0.8930 today
AT this juncture we are favoring call buying with the Australian dollar being supported by virtually all bad news being baked into its price for now. Granted we will be keen to know the Retail Sales data that comes out tomorrow at 12:30 GMT from the US, however the bias should remain intact.
The Australian currency has been pressured lower by bad Chinese data. Overnight we will get some more data from the world's second biggest economy that is likely to shape the moves during the next day or so. We favor buying daily calls on dips.
As regards to the levels from which we would be buying, the options are rather vast when we have a look at the chart. The AUD/USD binary options forex pair has moved lower to trade around 0.8923 early this morning, however some bids materialized and we are looking at 0.8980 as of writing.
So it all depends on the risk profile that we choose, for a very risky trade we would start buying at 0.8970, as far as safety goes we would prefer to buy daily calls in the 0.8925-30 area. There is not much traction for the remainder of the US session, so you better place these trades for tomorrow's expiry.
On the other hand if we see a clear break below the support line in the 0.8925-30 area, rest assured that it will be a big boost to the bears and we are very likely to see a test of the big support at 0.8900. Looking for the perfect trade is hard, but after the Chinese data is released at 05:30 GMT stay focused on this chart.
After the Chinese data is out of the way, the main risk event to our forecast is the US Retail Sales figures at 12:30 GMT. Only a very high number would help the US dollar rally, which means a rise by more than 0.6% over January's numbers. Stay sharp and enjoy your trading.