The Australian dollar to rebound, we are buying daily calls for tomorrow
The Australian dollar is showing signs of revival and most of the domestic negative news are already priced in. We are using current levels to buy calls for the 17th of December before we embark on more substantial trading.
It is possible that during the Asian session tomorrow we see some better lower levels for our strategy, but we are confident enough even around 0.8960 to buy some calls.
In order to justify our decision we will take your attention to the recent price action in the AUD/USD binary options forex pair. It has opened around 0.8960 in early Asian trading only to find early support after negative Chinese data around 0.8920.
The pair has rallied back into the 8060's just before Europe opened but that proved short lived as European traders sold it off to 0.8927 again in the wake of overall negative sentiment persisting since last week.
Well it all has ended once the US session got well on its way and was aided by a turn in Gold prices and overall risk sentiment surrounding risky assets such as stocks. The price looks poised to break to the upside above 0.8970.
We expect a lot of stop loss orders to be located between 0.8970 and 0.9000 and more aggressive players can play daily calls for today too. We are choosing a more cautious approach and think that tomorrow will be fine as well.
In our analysis the Federal Reserve is not going to start tapering this week and the USD bulls will be disappointed especially against high yielders such as the Australian dollar.