Aussie Still Rising
Posted on February 19, 2008
Filed Under AUD/USD |
For those of you who took my advice about the Australian Dollar I hope you are now sitting on a nice profit. The aussie dollar took off yesterday easily breaching the .91 level with the aussie canadian following suit. These moves were partly as a result of the RBA’s tough stance on inflation and the likelihood that interest rates will have to rise next month but also due to the expiry of significant open option positions at .91 last Friday. These have now all expired leaving the Australian dollar to further gains.
Understanding how options work and their influence on currency movements can help with entry and exit points in medium to longer term trading. Even scalpers can benefit from this knowledge as prices will often resist movement just prior to expiration. I have produced a specialist site dedicated to this subject: www.currency-options.trading.com which I hope explains this subject in more detail.
To return to the Aussie the price target against the dollar will be 0.94 last reached last November. I think we will make this target before the end of March and thereafter we could be looking at parity.
With regard to the aussie/cad we are looking at 0.93 as the first resistance before stretching up to 0.95.
As always with the Australian dollar it is important to keep an eye on the price of gold which seems intent on reaching $1000 an ounce.
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