Australian Dollar: Daily Stochastics Scream Oversold
Carol Harmer | Dec 03, 2013 04:00AM ET
The Aussie could not push through 9170 and as such was left weaker. Now we have hit excellent support at 9060/55 area at 9057 and I know it is quite difficult but as this is such an important level we need to close our eyes and buy when prices are down here.
The daily stochastics scream oversold at 11% and even short term we are at 18% and especially as we are also at a previous low which happens to be the 76.4 Med Term Fib level. So we have a lot of reasons to go long now. Placing stops is going to be the crunch because as this is such an important level we know that the algos are going to be out in force and 9050 breaking will automatically set these off. It's possible we could go down to 9020 before buyers come back into the market, so put the stops below 9014 just to give ourselves a chance. Personally, I believe below 8998 would be best, but let's see what happens.
So let us assume that the market holds this 9055 support and that we trade higher. Our first port of call would be 9135/40. Initially cover longs to here, then look to go back into longs above 9140 for 9170 to 9190.
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