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Strategist: Aussie Is Ready to Rise

Tuesday, 22 Jan 2013 | 4:49 PM ET
A Currency Trade From Down Under
Todd Gordon, TradingAnalysis.com, explains his trade on the AUD/USD; and the FMHR traders share their plays on a few stocks getting talked about on Twitter.

Have you been waiting for the Australian dollar to move?

If so , you are one patient trader. The Aussie has been stuck in a range against the dollar for a year and a half.

You may also be in luck.

Todd Gordon, founder of TradingAnalysis.com, has been watching the Australian dollar for some time, and he thinks the stars are finally aligning and it is ready to move higher.

Gordon says the 1.0600 level has been containing the topside, so that every time the Aussie approaches that level, investors start selling. But overnight, Australia will report its fourth-quarter inflation, and the following night, the HSBC flash PMI for China will be released, which Gordon expects to be more reliable than Chinese government figures.

The Sydney Morning Herald | Fairfax Media | Getty Images

"Some good readings there would solidify a non-rate cut" from Australia's central bank in February, he told CNBC's Scott Wapner. And since investors are expecting a cut, and the resulting downward pressure on the Australian dollar, "that will push us up through the 1.0600 level."

So Gordon wants to buy the Australian dollar once it breaks through that key 1.0600 level against the dollar. When it does, he recommends setting a stop at 1.0500 and looking for a move to 1.0900.

Tune In: CNBC's "Money in Motion Currency Trading" airs on Fridays at 5:30pm and repeats on Saturdays at 7pm.

Learn more: The essential vocabulary for currency trading is on Key Terms Dictionary. Top currency strategies are broken down for you in Currency Class.

Talk back: Tell us what you want to hear about - email us at moneyinmotion@cnbc.com.

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