Improving growth bullish for Australian dollar
The Australian economy accelerates. Will the Australian dollar continue strengthening?
On the daily timeframe AUDUSD: D1 is retracing higher after hitting nine-month low in the beginning of May. The price has risen above the 200-day and 50-day moving averages MA(200) and MA(50), both rising.
- The Donchian channel indicates no trend yet: it is flat.
- The MACD indicator is above the signal line and the gap is widening, which is a bullish signal.
- The Parabolic indicator has formed a buy signal.
- The stochastic oscillator is rising but hasn’t reached the overbought zone yet.
WWe believe the bullish momentum will continue after the price closes above the upper boundary of Donchian channel at 0.8028, confirmed also by fractal high. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the Parabolic signal at 0.7853. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (0.7853) without reaching the order (0.8028), we recommend cancelling the position: the market has undergone internal changes which were not taken into account.
Summary of technical analysis:
| Position | Buy |
| Buy stop | Above 0.8028 |
| Stop loss | Below 0.7853 |