GROWTHACES.COM Forex Trading Strategies

USD/CAD: sell at 1.3080, target 1.2920, stop-loss 1.3140, risk factor ***

AUD/USD: buy at 0.7285, target 0.7420, stop-loss 0.7225, risk factor ***

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AUD/USD Hit By Surprise Yuan Devaluation

(buy at 0.7285)

• The AUD fell sharply after China’s central bank allowed its yuan to fall to levels last seen in 2012 and said it was aiming for a depreciation of 2%.
• Not helping the AUD was a survey showing local business confidence and conditions weakening in July. The index of business confidence slipped 4 points to +4 in July. Its measure of business conditions also dipped 4 points to +6. The survey’s index of sales eased back to +11, from a very strong +19 in June, while profitability dropped 3 points to +7. Forward orders fell 3 points to +2, while the index of employment eased back into negative territory at -1. The pullback in index would be sobering news for the Reserve Bank of Australia which had recently made much of the pick-up in business confidence as one argument against the need for further cuts in interest rates.
• We have cancelled our sell order on the AUD/USD. In our opinion the AUD/USD may recover slightly in the coming days, as the reaction to the decision of the Chinese central bank should not last long. Moreover, we may see a bit weaker USD today and tomorrow, but US retail sales data may change the market picture again on Thursday. We have placed a buy AUD/USD order at 0.7285 but this strategy is risky.

Significant technical analysis’ levels:

Resistance: 0.7440 (session high Aug 11), 0.7450 (high Jul 21), 0.7489 (high Jul 15)

Support: 0.7305 (session low Aug 11), 0.7264 (low Aug 4), 0.7260 (low Aug 3)