Fundamental Analysis and Direction: I still am bullish on Australia and its prospects. One of the risks that I have been monitoring is the business confidence. This month it came out really well, and supports my technical position to maintain long on AUDUSD.
Another risk that can affect Australia are developments in China linked to the commodity market, as they have a 23% exposure to China in terms of trade. So, if their top trading partner, China, catches a cold, so will Australia. Japan is another important partner of Australia. Japan's data also came out well this month despite all the negative news surrounding Japan, but given the uncertainty and the sentiment, I don't think helicopter money will work out for Japan.
Another risk that I am keeping my eyes on is Australian housing. It hasn't been looking good this month, but other factors do contribute to the bullish thesis for Australia's economy. So, I will give them the benefit of the doubt, since they are still transitioning from a late recession.
I need to see how their central bank reacts to all of this data. I do not believe that they need to lower rates anymore, just like the central bank hinted at: "recent data suggest overall growth is continuing, despite a very large decline in business investment" (rba.gov.au/media-releases/2016/mr-16-16.html).
So, I will remain bullish fundamentally!
Technical Analysis: This is a pattern that I love. So, I am taking the trade. what's more, a bullish trade lines up with my fundamental direction.
Comments: I am going on a road trip, so I will not be actively monitoring the market for a few weeks. Holding all current swing trades. I do not plan on entering any further positions.