Australian dollar has corrected from its high of 1.1078 level, this level was the highest level of decade. We have seen AUSUSD pair correcting from the 1.1078 level to 0.9926 level, this correction has made good buying opportunity in the forex market. As the global meltdown was another issue which created global demand for USD in market and the selling in other currencies. Also we have noticed inflation in Australian economy was reported higher than expected in last month’s data, so this inflation may result in further interest rate hike pressure on RBA (Reserve bank of Australia). So swing traders will be looking for the carry trade opportunities as the interest rates difference for long positions in AUD (Australian dollar) is favorable for carry trade opportunity in near term trading. Our advice for short term will be to keep looking for buying opportunities in this pair as long as price action is above 1.0655 level and also trend must be favorable. Slow stochastic indicator suggest us our entries are valid according to our trading system using daily chart. At this point of time we may see the pair to follow its trend and strengthen further to test our target of 1.0795 and 1.0955 level, traders must place their stop loss just below the 1.0625 level as this will invalidate the bullish momentum. Trading in the direction of the daily trend we recommend to trade long positions on AUDUSD pair.
How to trade AUDUSD:
We strongly advice to take the long side of the trade i.e open buy positions in AUDUSD above 1.0665 for target of 1.0795 and 1.0955 zones, a protective stop loss order should be placed below 1.0625 level. Carry trade is more preferred even the targets are reached, for such trades one can have a trailing stop loss.
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