As the dollar continues to exert weakness across the board, and as the Australian economy showing remarkable resilience with economy growing at 3.4 percent y/y in the second quarter of 2018 with unemployment rate hitting 5 percent, despite steady increases in the participation rate, we believe that conditions are currently right to go long on the Australian dollar, based on our calculations.
Trade idea:
We recommend our reader to go long on the Australian dollar, at the current rate of 0.726 against the USD and at dips with a target around 0.77 area. The stop loss should be maintained around 0.7 area.