Australian Dollar Oversold Short-Term
Carol Harmer | Sep 17, 2013 05:16AM ET
The Aussie has been grinding higher and yesterday in Asia we saw it hit .9400 which was just off our .9432 target from a few weeks ago. Since the currency has nearly reached its short-term technical target, there was a lot of profit taking which took us down to the short term 61.8% Fib level, located at .9289--the low being 9285.
It's now oversold on the 60 minute charts, so we'll see if this fib level can hold the market and provoke a move higher.
.9320 is the Daily Pivot point. Above that we have a good chance of further upside moves toward .9394/9400. From there we could again see sellers back in the market. If you take a look at the daily stochastics, you see that they are beginning to turn negative for the first time since the start of this rally from .8890, so this is quite a critical time for the Aussie.
We recommend that dips should be bought short term. We'd be looking to turn them for a profit in the .9380/90 area. If you're selling the market at these higher levels, keeping stops above .9435.
Support is located at 9285. If we break below there, then we could be seeing the start of the demise of the currency and we look for .9225 to .9213 as a short term objective.
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