2016-10-26 12:38:56

Review and dynamics
Today, the Australian dollar has significantly strengthened in the Forex market on the news that Australian consumer prices in Q3 have exceeded the forecast. The Australian dollar remains one of the most stable currency, which makes is attractive for the investors, who prefer "carry-trade" strategies (interest rate in Australia is 1.5%, which is one of the highest in the countries with advanced economies).

Our opinion
The pair AUD/USD has grown to the key resistance level of 0.7700. As we know this was the level at which sales in the pair had been increased. The USD also remains one of the favourite currencies in the market. It is possible that the sales of the AUD/USD will again increase at the current level of 0.7700 with the next target of 0.7610 (ЕМА50 on the daily chart and ЕМА200 on 4-hour chart).

Breakdown of this support level can trigger further decline in the pair AUD/USD to the level of 0.7520 (ЕМА200, the lower limit of the ascending channel on the daily chart).

Breakdown of the support level of 0.7445 (Fibonacci 23.6% after the decline since July 2014) may terminate the uptrend in the pair AUD/USD. In this case the pair will go down to support levels of 0.7325 and 0.7140 (lows of May).

Alternative scenario:

On the weekly chart the pair AUD/USD remains in the ascending channel with the upper limit near the level of 0.7960 (ЕМА144 on the weekly chart). If the pair breaks out this level and consolidates above the level of 0.7700, the rise in the pair may continue up to to the levels 0.7820 (Fibonacci 38.2% and highs of April), 0.7960 (ЕМА144 on the weekly chart), 0.8130 (Fibonacci 50.0%) and 0.8200 (ЕМА200 on the weekly chart).

However this scenario will be feasible if the indicators OsMA and Stochastic on the hourly and 4-hour charts change movement direction and start to give signals to buy.

Meanwhile, the indicators give sell signals as part of the correction.

Support levels: 0.7610, 0.7520, 0.7445, 0.7325, 0.7290, 0.7200 and 0.7140.
Resistance levels: 0.7700, 0.7820, 0.7900 and 0.7960.

Trading tips
Sell on the market. Stop-Loss: 0.7750. Take-Profit: 0.7665, 0.7610, 0.7520, 0.7500 and 0.7445.
Buy Stop: 0.7750. Stop-Loss: 0.7690. Take-Profit: 0.7800, 0.7820, 0.7900 and 0.7960.

In the ascending channel
In the ascending channel

At the key resistance level of 0.7700
At the key resistance level of 0.7700