0.9220/30 poses the same sort of scenario as I’ve just mentioned in EUR/USD. 0.9330 odd was the highest we got from the first drop down below 0.9000. At the moment it still looks like we have a potential, short term double bottom in place and the question is whether we are going to get a short term double top.
AUD/USD daily chart 09 September 2013
The potential is for there to be a double top put in place either here around 0.9220/30 or further up towards 0.9320/30, which was the scene of strong resistance from the big June falls from the 0.96’s.
The questions still unanswered are whether any improvements to the US economy are going to be good just for the dollar or commodity currencies as well. Also talk about re-igniting the mining boom is entering the picture from the aussie elections. The reasons for looking up are starting to match the reasons for looking down.
For bears it’s a fairly tough call whether to short here or at the higher levels or to take profits on older shorts. For bulls, a break of these levels should see a push higher towards 0.96.
I’m personally loathed to short at this 0.9220/30 level and would probably look to trade a break above with a t/p and short entry at 0.9300/20. I would keep that fairly tight and trade reverse on a break of 0.9330/40 looking for 0.9600.
