Weak data bearish for AUDUSD

29 mars 2018

Australian economic data have been mostly weaker than expected recently: the Australian economy grew 0.4% over quarter in the last three months of 2017 when 0.6% growth was expected, and retail sales in January rose just 0.1% on month when 0.4% growth was expected after 0.5% drop in December. The turning of the balance of trade deficit of over 1 billion Australian dollars into a surplus of roughly the same size in January was a positive development though. The Reserve Bank of Australia is expected to leave the policy unchanged at its April 3 meeting.

On the daily timeframe AUDUSD is retracing lower after hitting thirty-four-month high in the end of January.

The Donchian channel indicates downtrend: it is tilted lower.
The MACD indicator is below the signal line with the gap widening. This is a bearish signal.

I believe a bearish momentum will continue after the price breaches below the lower Donchian boundary at 0.7642. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian channel at 0.7801. After placing the pending order the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop-loss level (0.7801) without reaching the order (0.7642) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary
Position Sell
Sell Stop Below 0.7642
Stop loss Above 0.7801