AUD Trading Outlook
We may be seeing the re-launch of the USD bear trend and buying AUD/USD dips is the obvious play. We will continue to see plenty of volatility on the crosses, like we had yesterday in AUD/JPY, so picking the right entry level is still vital.
The AUD looks increasingly strong on the crosses and this will give support to AUD/USD on any dips. Barrier protection ahead of .9600 is expected to be very heavy. More range trading in AUD/USD then, possibly .9490/.9590 range.
More choppy range trading can be expected as we await the debt-deal details out of Washington. If volatility picks up, we could see a wide range between .9450/.9550 but more likely we see a tight 40 pip range with moves dependent on flows in the crosses.
At this stage I think it is much riskier to be long USD than it is to be short. Certainly we will see a spike up in the USD if/when a deal is announced but any USD rallies are medium-term selling opportunities in my view. I would try to keep my AUD/USD exposure as low as possible and wait for big swings for a trading opportunity.
I’m still in the range trading camp. I remain bearish on the USD but the AUD may struggle on the crosses whilst risk aversion is heightened. Play the .9380/.9480 range but I’m sticking with my bullish bias.
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