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Bullish AUD

The Australian Dollar traded on Monday the 16^th of July reaching an eighteen year high of 0.8762 before retreating to close at 0.8714 in the New York session. With buoyant economic data in recent times, the Australian Dollar remains strongly supported as a high yielding currency, with several analysts expecting it to reach 0.9000 in the mid-term.

The risk for traders lies in trying to pick the top and sell the currency in the hope that a significant correction will come to fruition. The General Market view on the AUD, is traders looking for any opportunities to purchase the AUD on pullbacks, in essence “buying on dips”.

The Australian Dollar continues to aim for the February 15, 1989 high of 0.8795, as data out of the U.S. this week is expected to show a decline in inflation and home construction further weighing heavy on the greenback. With speculation that the Federal Reserve may be forced to cut rates some time in 2007, the RBA sits on the other side of the coin with a view towards monetary tightening, ensuring that the Aussie dollar is seen as “bullish”.

As highlighted by the graph below, the AUD looks to be well supported with a significant rising trend-line maintaining upward pressure on the Aussie Dollar. The AUD finds support levels at 0.8705 and 0.8675 respectively.     

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