Australian currency may benefit both from weaker US dollar and higher commodities prices

Australian dollar edged up on Monday amid weaker US dollar and increased global commodities prices. First televised debate was held on Monday in US where Republican Donald Trump and Democrat Hillary Clinton clashed. Clinton won the debate by putting her challenger on defensive. Most investors believe the Republicans are more interested in weaker US dollar to support the US producers. If Trump had won the debates this could have pushed the US dollar index down.

Weaker dollar would make other currencies stronger including the Australian dollar. Another factor to support the Aussie may become higher oil prices ahead of International energy forum in Algeria where OPEC members will discuss possible oil output “freeze”. The forum takes place on September 26-28. Higher oil prices push up prices of main Australia’s export goods: natural gas, coal, nonferrous metals, mineral resources and concentrates as well as grains and beef. The Reserve Bank of Australia meets on October 4. The bank cut the rate twice by 0.25% in 2016 down from 2% to the current historical low of 1.5%. Market participants do not expect it to be cut further in nearest future. Economic indicators in Australia look quite positive. GDP rose 3.3% in Q2 2016 year over year which is the highest in 4 years. Unemployment fell in August to its 3-year low of 5.6%.
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AUDUSD

On the daily chart AUDUSD: D1 is in triangle with very wide boundaries. Now it is rising towards the resistance line. The political risks in US ahead of presidential elections and dearer commodities may further support the Australian dollar.

The Parabolic gives bullish signals.
The Bollinger bands have narrowed which means lower volatility and are tilted upwards.
RSI has surpassed the level of 50 having formed positive divergence.
MACD gives bullish signals.

The bullish momentum may develop in case the Australian dollar surpasses the two last fractal highs, the Bollinger band and resistance of the triangle at 0.773. This level may serve the point of entry. The initial stop-loss may be placed below the last fractal low, the Parabolic signal, the Bollinger band and support of the rising trend at 0.744. Having opened the pending order we shall move the stop to the next fractal low following the Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most risk-averse traders may switch to the 4-hour chart after the trade and place there a stop-loss moving it in the direction of the trade. If the price meets the stop-loss level at 0.744 without reaching the order at 0.773, we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Summary of technical analysis

Position Buy
Buy stop above 0.773
Stop loss below 0.744