In Focus: AUDUSD after the cut & outlook

With the RBA's move of 50bps reduction on rates have been seen as a realignment of rates corresponding with the rest of the other majors. Some analysts have attributed it to the aggressive stance taken by the Reserve Bank of Australia from its previous carefully selected outlook of the global economy compared to its own. But this move have taken it straight through the months ahead and would simply monitor how it would directly affect their trade balance sheet with their trading partners at the second quarter of the year.

AUDUSD WEEKLY

On the Technical perspective, this movement have litteraly justified the bearish candle pattern of the Aussie in the weekly formation. From a significant high price at 1.0855 registered on Feb.26 which was the target objective and Price reversal point that led the bearish trend for the Aussie Dollar and currently resting just above its 21week Moving average at 1.0335. However, this has given the Aussie additional leverage in the longer term period both techncially and fundamentally to perpare for some room to continue its bullish formation. The prices are well within a rising trend and channel that would support position traders / investors a considerable leverage to play and average a cross trade between rates of other currency majors.

We are currently looking at a possibility of extension just above the parity level as indicated in the broken trendline support & channel shown on the figure. And please refer to the monthly configuration that the inital bearish ner term trend would be good for short term positions before the next leg higher would be made. Key prices to check would be 1.0190-1.0220 range on the low side of the prices.

Technical Perspective: GBPJPY - Part 2 Update



DAILY GBPJPY CROSS as of MCH 21 '12



UPDATE: The same holds true for the GBPJPY cross as it had touched its 2nd objective and above the 133.00 range we mentioned from the opening trading day. The extension price at 133.46 may likewise find some temporary pullbacks as position liquidation & settlements may meet some speculative shorts aiming for some stronger pullbacks from this high.

However, going against the current trend may prove to be fruitless unless risk tolerance if in case it moves towards the levels of 134.80 and equivalent price of the USDJPY at the objective of 85.10 resistance levels. Although, the GBPJPY has proven to have a more profit potential compared with the relative movement of the EURJPY. But both positions taken then on the 12th of March also defined the actual trend of the EURJPY from our previous liquidation at the 108.11 from a low of 105.55 pivotal support price. The daily chart formation so far shows no indication of a price reversal, but we do find a "pullback from these higher levels" towards the end of the week & month trading. We do have a five (5) trading weeks to offset the trading holiday schedule for the coming holy week this April. Watch for the closing prices on both the cross rates and majors for the end of the 1st quarter. 

Technical Perspective: AUDUSD

The daily technical outlook for the Aussie dollar indicates a daily 'Harami' candle formation signifying a bullish pattern which was supported with the recent upward move towards the 1.0777 level, after the correction to the 1.0638. Although, the recent high of the Aussie Dollar at the 1.0843 was an extension price above our objective dated the 26th of January Market view report; considered a new high defining an uptrend has been established.

The contradiction would be a weekly formation that defines a spinning top signaling a probable correction is in sight. As some of the analyst have stated that the AUDUSD is a step away from a possible reversal. price wise could be a probability but trend wise its not.Of course, again otherwise proven to be wrong. An indecision could have been seen as the market in itself has been quiet for the opening trading day. The market behavior for the Aussie may well be simply a pause with a tight daily range before a resumption would be made towards the upward direction. Currently its slightly above the 21day MA of 1.0635 and otherwise the direction changes lower the support would be at 1.0540/50 levels within another rising channel still intact.

GUIDE FOR CANDLESTICK INTERPRETATION

Spinning Tops are depicted with small bodies relative to the shadows. This demonstrates some indecision on the part of the bulls and the bears. They are considered neutral when trading in a sideways market. However, in a trending or oscillating market, a relatively good rule of thumb is that the next days trading will probably move in the direction of the opening price. The size of the shadow is not as important as the size of the body for forming a Spinning Top.



A Harami candle chart pattern in which a large candlestick is followed by a smaller candlestick whose body is located within the vertical range of the larger body. In terms of candlestick colors, the bullish harami is a downtrend of negative-colored (black) candlesticks engulfing a small positive (white) candlestick, giving a sign of a reversal of the downward trend.