Last week the aussie continued its fall from from the 0.97’s but a break of 0.9300 was short lived and the buyers stepped in to say enough is enough.
I highlighted the 0.9265/79 area as points of support that could stem the falls and the 100 dma held up magnificently, then the 0.9279 held for two days to confirm the bottom and give a clear signal that we were going back up.
AUD/USD daily chart 19 11 2013
We’ve broken back into the 0.94’s and so far the 55 dma is containing the moves higher. Currently it’s at at 0.9419 and I’d like to see a close above to show that we may still move higher. I picked up longs on the way down at 0.95, 0.94 and 0.93 so I’m more or less flat in the profit column. I can see the pair pushing higher from here but it’s going to face some stiff opposition around the 0.9520/30 area which has been an area of support previously. If we get into this area I’m going to be watching closely to see how the action plays out and whether I decide to take some off the table or think about turning tail for another move back towards 0.9300.
The kiwi is in a similar position having bounced from the former July resistance line and the convergence of several medium and long term moving averages around 0.8175/8200. I took a long just ahead of 0.8200 and took some off at 0.8255 and more when we broke through 0.8300, leaving about 50% of my position.
NZD/USD daily chart 19 11 2013
Just like the AUD we’re facing a potential top at 0.8400 which capped the first bounce from 0.8200 back in October at 0.8412. Again, we’ll need to see this taken out or face falling back towards 0.8200 again. Again I’ll be watching to see whether to book it all and reverse or let it ride higher maybe buying the break.
I still think buying dips towards 0.8200 is a good play with the amount of support down there, and with the RBNZ still possibly looking to raise rates next year it should pay to trade from the long side going into the new year. Of course one eye is always trained on the other side of the globe to see what effects there may be on the US dollar side of the trade.