AUD/USD Forecast 04/11: Aussie Nears Buying Zone (Video)

(MENAFN- Daily Forex) The RBA raised rates early today, but it seems like the balance of traders believe that the RBA may be holding in the future.

AUD/USD

The Aussie dollar fell during the trading session on Tuesday, despite the fact that the RBA raised rates during the early part of the session, and there is an interest rate differential between the two that favors Australia. That being said, it is worth noting that 3 of the members at the RBA were against the hike.

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So, I think the market is trying to get in front of the idea that maybe the Australians will slow down. I do not think this changes too much from the longer-term standpoint, though. We are a little bit below the 200-day EMA, but when I look at this chart, it is a market that has been consolidating between 0.6850 on the bottom and 0.7250 on the top.

I do think this is a buy-the-dip type of scenario.

It is really not until we break down below the 0.6850 level that I am looking to short this pair. That is not that I do not like the U.S. dollar; actually, I do. But the Australian dollar is a little bit of a different conversation, mainly due to the fact that the interest rate differential does favor it.

EURUSD Chart by TradingView

So, why bother here when you can buy the dollar against weaker currencies as far as the interest rate differentials are concerned, such as the Swiss franc, as an example? Commodities getting a boost could help the Aussie as well. Maybe watch the copper market as a bit of a secondary or even tertiary signal.

I like the idea of looking for value closer to the 0.69 level. If I am wrong, then I should have plenty of time to short this and ride it much lower. So, the setup really is not there yet, but I do think that we are getting at least closer to an area that would be closer to the bottom of the double bottom that recently formed

That would become very interesting if we turn around and take out the 50-day EMA to the upside and 0.7029. Then maybe I start thinking about buying for a move towards the top of the range.

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