Finotec News Archive - August 27 2007
Australian Dollar Heads for a Bullish Movement
Australia's dollar climbed 2.8 percent to 81.96 U.S. cents as of 5 p.m. in Sydney from 79.77 cents in New York on Aug. 17, when it reached a nine-month low. Against the yen, it traded at 94.87 from 91.22 at the close last week, a 3.6 percent rise.
Australia's dollar climbed 2.8 percent to 81.96 U.S. cents as of 5 p.m. in Sydney from 79.77 cents in New York on Aug. 17, when it reached a nine-month low. Against the yen, it traded at 94.87 from 91.22 at the close last week, a 3.6 percent rise.Anthony Boyajian 
27 August 2007
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Australia's dollar climbed 2.8 percent to 81.96 U.S. cents as of 5 p.m. in Sydney from 79.77 cents in New York on Aug. 17, when it reached a nine-month low. Against the yen, it traded at 94.87 from 91.22 at the close last week, a 3.6 percent rise.
The currency has recovered from a slump last week as the Morgan Stanley Capital International Asia-Pacific Index of shares strengthened 7.9 percent, almost reversing an 8 percent drop last week, suggesting a revival for riskier investments.
The Australian dollar headed for the biggest weekly gain in 19 months against the U.S. currency as investors resumed buying the nation's financial assets with money borrowed in Japan.
The currency was also set for the largest weekly advance against the yen since February 2005 as signs of growing appetite for risk such as higher stocks and commodity prices gave investors confidence to put on so-called carry trades. Australia, with interest rates at an 11-year high of 6.5 percent, is a favored destination for such investment flows.
The following technical analysis gives us a detailed lookout on what is expected to happen to AUD/USD
The buying point is at 0.8200; based on a continuation of an uptrend.
- Fibonacci retracement 61.8% is the take profit at 0.8301
- Fibonacci retracement 38.2% will be the stop loss at 0.7977
The selling point is at 0.7873; based on a break of a strong support at 0.7900
- Previous support is the take profit at 0.7730
- Fibonacci retracement 38.2% is the stop loss at 0.7977
To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the crossing of the two moving averages below the zero line, the shorter term moving average is faster than the long term and is pointing upwards with break of zero line. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI, we can determine that the market is in a bullish direction and it is in an uptrend.
The ATR (Average True Range) gives us the volatility of the pair and in this case we see the market volatility is in an uptrend. The momentum oscillator is very important to understand the strength of the market and as we see on the graph; it bounce on the zero line and moving upwards. ROC (Rate of Change) is giving us the demand of the market and shows us the strength of the buyers are much higher then the sellers. The Stochastic oscillator has a lot of momentum and it bounce on 20% line.
* The following analysis is for information only; Finotec is not responsible for any
decisions or misinterpretations based on the given text.
By Finotec’s professional analyst,
Tony B.
dealingdesk@finotec.com
Finotec Analysis Team
27 August 2007
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