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AUD/USD Forecast 17 Oct 2014

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AUD/USD Chart 17 Oct 2014
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The Aussie is preparing to take off in the coming hours

As the market is gearing for the final hours of the week, we are looking at prices for binary options on the AUD/USD forex pair. There has been little scope for the Australian currency to rally big this week. All attempts to the upside have been capped by aggressive sellers and short term profit-taking. On Friday however as we know, everything is possible, including a sharp rally.

The Aussie has suffered from lowering inflation forecasts, to increasing unemployment rate and of course the all vigilant Reserve Bank of Australia which keeps saying that the Australian dollar is overvalued. Well, the good news is that all these negative factors have already been priced into the market.

Meanwhile, looking at the charts we are observing a channel which if broken could bring the long awaited relief for those who believe that the AUD/USD should trade higher. We are for now amongst those, and would be looking for an opportunity to buy daily calls in case prices move higher towards 0.8770 again.

The other price level which our vigilant eyes will be looking after is 0.8790-95 - if we see an hourly close above this level, we would be buyers again and not much can change our scope to be bullish on the Australian dollar. The U.S. will be releasing housing data later today at 12:30 GMT.

Building Permits are expected to rise by 2.8%, while Housing Starts are set to increase by 4.8% during the month of September. While the Federal Reserve's chair Janet Yellen speaks at 12:30 GMT, we will be awaiting the last batch of economic news from the United States - Consumer Sentiment at 13:55 GMT, expected at 84.2.

Looking at alternative scenarios, out daily call options would definitely fail if instead of a break to the upside we get overwhelmingly positive U.S. data (again highly unlikely) and prices fall below 0.8730 and close below on an hourly basis. In that case, buying daily puts will make more sense as the end of the week can bring a selloff.

Expiry time: 20:00 GMT

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. He has no business nor personal relationships with any mentioned government entities or stocks. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion.

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