The basic elements
AUDUSD fell to 0.6940 after China released its monthly Caixin Service PMI data that deteriorated early Monday. This currency pair was previously supported from PMI data from Australia. However, the risk of war between the US and Iran has weighed on market sentiment and pinned AUDUSD below the lowest price level last week.
New York Federal Reserve chairman John Williams recently stressed the need to stick to the 2% inflation target. This is considered to have triggered the retreat of the US dollar despite the increased purchasing power of the greenback after tensions between the US and Iran.
Recent news has shown that Iran's revenge against the United States is quite high and so the risk of war is evident. Therefore, the risk of the market is more severe with the 10-year Treasury bond interest rate falling to the lowest level in a month of nearly 1.77%.
After the hot rally, profit-taking ability plus basic factors could push AUDUSD to recover before the next move.
Technical analysis
Technically, on the daily chart of AUDUSD has come down to Flipzone zone 0.6928. This is also a sub demand area. If this zone is broken, the possibility is high, AUDUSD will continue to advance to the next major demand zone at 0.6861 and retest the red down trendline that has been broken earlier. On the contrary, without breaking the demand area and Flipzone 0.6928, AUDUSD will continue its uptrend to 0.7075.
REFERENCE STRATEGIES
Buy 0.693
Take profit 0.707
Stop loss 0.690
Recommendation: This is just a Trading Idea. For more accurate analysis, you should incorporate other indicators that you have mastered. In particular, always focus on capital management methods to prevent any possible market situation.
Author: Nguyen Chi Thanh
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