AUDUSD pair starts the last week of the year with a sharp increase of almost 1%. It is very important that the quotations are going up from the flat, where they were all last week. The scenario of a possible break of the rising trend from the October lows did not materialize, which means that the way to update the local highs is near 0.69.
Positive news for Australia and other countries of the region came from China. Since January, China is cancelling the last barriers for foreign tourists. In fact, it can be said that Asia's largest economy is on the way out of the Covid restrictions, and even the sharp rise in local disease is now considered as a temporary problem. Australian and Chinese economies are closely connected, and for the Australian currency the acceleration of one of its main trading partners is also a favorable factor.
The latest statistics on the U.S. economy also contributes to AUDUSD growth. Inflation continues to decrease as it was forecasted, which means there are fewer reasons for the Fed to raise rates in the future. In addition, the weak dollar is beneficial for all commodities, and Australia is one of the largest exporters of natural resources in the world.
Some worries are caused by the upward rush of AUDUSD, which we are observing today. As a result, there may be a gap, which the price will try to close as soon as possible. Therefore, more cautious traders should consider opening a position around 0.67. Then it is possible to use the 100-day moving average as a Stop loss, now it passes at 0.665.
When making deals, it is also necessary to consider the low liquidity of the market during the Christmas and New Year holidays, and, as a consequence, the potentially high volatility.
The following trading strategy options can be offered:
1) Buy AUDUSD at the current price. Take profit 1 – 0.685. Take profit 2 – 0.69. Stop loss – 0.672.
2) Buy AUDUSD on the fall to 0.67. Take profit 1 – 0.68. Take profit 2 – 0.69. Stop loss – 0.665.
Also, traders may use Trailing stop instead of a fixed Stop loss at their convenience.