Recently, I have regularly observed the price movement of AUDUSD and got relative profits from short positions on the downside main trend and long positions on the upside corrective rally of this currency pair.
As you know, after affirming by rating agency Fitch, Australia’s rating at AAA with stable outlook, the Australian dollar is now the strongest pair among G10 currencies. The Aussie price extended its recovery from four month lows and is also benefiting from rising copper and gold prices on global markets. Weaker U.S. dollar also helps gaining some traction of the Aussie.
From my point of wiev, in long term and intermediate term, AUDUSD remains in the sideways market, but in short term, this currency pair may turn into a rally. On 12 May 2017, I stated that I expected AUDUSD to trend higher in short term because it bottomed at 0.7330. I advised buy strategy for this currency pair.
I have just taken profit for some long positions and been waiting for a downside correction toward 0.7370 to enter more long positions in AUDUSD. I think that selling the rally in AUDUSD at this stage is very dangerous and too early because the technical chart of this currency pair is not in highly overbought area. We should wait more time in case we consider short positions for AUDUSD.
By Jack Huyn