DailyFX Analysts Bullish AUD

• 5 out of 9 DailyFX Analysts looking to go long Australian dollars
• AUD/USD Top Pick

The Australian dollar hit a 25 year high earlier this week. Even though the currency has retraced since then, DailyFX analysts expect the rally to resume. Read on to find out why:

Chief Currency Analyst - Kathy Lien

My picks: Long AUD/USD
Expertise: Combining Fundamentals with Technicals
Average Time Frame of Trades: 1-3 Days

Australian producer prices are due for release Sunday night and I think they will be hot. The AUD/USD is also holding well above its breakour zone at 9675. I am bullish here (0.9723) against 0.9650 for a move above 0.9800.

Senior Currency Strategist - Boris Schlossberg

My picks: Long AUDUSD
Expertise: Fundamental
Average Time Frame of Trades: 6-24 hours

Aussie continues to benefit from postive spec flows now that the market has decided that there is no danger of a rate cut anytime this year. IF US stocks give up their early mornign gains and if Sunday night PPI data proves to be hot then a long AUDUSD looks to be a solid play for the next 24 hours

Technical Currency Analyst - Jaime Saettle

My picks: AUDUSD Long against .9677, move to breakeven at .9790, target is 1.00.
Expertise: Technical, Behavioral Finance
Average Time Frame of Trades: 1 month

The blow-off top in the AUDUSD is underway. The setback from .9849 has reached and bounced from just above the 50% of .9475-.9849. The drop is clearly in 3 waves (corrective) to this point; therefore evidence continues to support bulls. A cautious bullish bias is warranted against .9677.

By contract, the next NZDUSD trade will come from the short side and probable be longer term in nature. Expectations are for price to plunge later this year and eventually test the .5927. This NZDUSD short is setting up as one of the best opportunities in recent years. Longer term traders can short now against .7921. I would rather wait for the short term structure to clear up before committing. Expect a short in the next few weeks though.

Quantitative Currency Strategist - Antonio Sousa

My picks: Long AUD/NZD
Expertise: Interest Rate Dynamics, Volatility and Sentiment
Average Time Frame of Trades: 1 week to 1 year

New Zealand's economy is not far from a technical recession and I expect the Australian dollar to outperform the New Zealand dollar on speculation the Reserve Bank of New Zealand could have to cut interest rates faster than the Reserve Bank of Australia. Indeed, according to overnight index swaps, which measure interest rate expectations for next twelve months, traders expect the RBA to be more hawkish than the RBNZ in the second half of 2008. While the RBA is expected to keep rates unchanged, the RBNZ is expected cut rates by more than 100bps . Generally, lower interest rates make holding the New Zealand dollar less attractive to foreign investors and the lower level of demand for assets denominated in New Zealand dollars could accelerate the gains in the AUD/NZD. My trading recommendation is to buy AUD/NZD at the market for a 300 pips profit potential with a stop in a daily close below 1.2550.

Currency Strategist - Terri Belkas

My picks: Long AUD/USD
Expertise: Fundamentals Combined With Technicals
Average Time Frame of Trades: 1-3 Days

Currently, AUD/USD is holding up above the psychologically important 0.9700 level and the 38.2% fib at 0.9707. While I think AUD/USD could dip down for another test of a rising trendline that has served as resistance throughout the year (now support) near 0.9680 or the 50% fib of 0.9475 - 0.9849 at 0.9662, I like the pair to the upside. The Aussie is still in an uptrend, leaving little reason to fight it. From a fundamental standpoint, Australian CPI figures scheduled to be released next Tuesday are expected to reflect persistant inflation pressures, which could support the currency further. Likewise, a continuation of the rally in gold - with which the Aussie tends to hold a correlation - could also lead AUD/USD higher.

Currency Analyst - David Rodriguez

My picks: AUD/JPY Long
Expertise: Quantitative Analysis, System Trading
Average Time Frame of Trades: 2-10 weeks

Last week I wrote, "... I'm now waiting to see if [the AUDJPY can sustain a break above the key 103.00-103.20 congestion zone. If price moves above said area and closes an hourly bar above, I think a quick profit can be made to 103.71, with eventual profit targets at previous spike-highs of 107.22. Only a meltdown in commodity markets would really change my bullish AUD bias." The AUDJPY did indeed break above 103.20, but subsequently lost nearly 200 points in practically no time. Extremely whippy price action in JPY pairs somewhat dents my optimism for the broader JPY-short carry trade, but the AUDJPY has clearly broken resistance and looks poised to make a further run higher. If you're willing to allow for sizeable pullbacks, I would look to go long the AUDJPY at or near current market levels, placing max risk below a recent double-bottom at 101.50, with profit targets set at previous highs of 107.90.

Currency Analyst - Ilya Spivak

My picks: Short NZDUSD
Expertise: Macro Fundamentals, Classic Technical Analysis
Average Time Frame of Trades: 1 week - 6 months

NZDUSD has oscillated to the top of a bearish channel that has guided prices lower since mid-March. Wednesday's price action put in a Hanging Man candlestick directly at resistance, suggesting a downward reversal was forthcoming. Thursdays down move confirmed the bearish bias.

Strategy: Short NZDUSD around 0.7680-0.7720, set stop-loss at 0.7786, set target at 0.7481

Currency Analyst - John Rivera

My picks: Short AUDUSD
Expertise: Fundamentals Combined With Technicals
Average Time Frame of Trades: 1-2 Days

I am looking to try and grab some pips as the Australian Dollar retraces from its multi decade high, as Gold prices come under pressure. Looks like it could fall back to the 50 Day SMA at 0.9555. Although the 20 Day SMA at 0.9621 may provide support. I would stay in the trade until Tuesday's inflation release, which may trigger another bullish rally.

DailyFX

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