AUD/USD technical landscape ahead of today's data
AUD/USD:
In the early hours of Monday, the commodity-linked currency derived fresh impetus from better-than-expected Caixin PMI data out of China. Further buying materialised in US trade as unearthed speculations of a Fed rate cut on the back of comments from Chicago Fed President Bullard.
Although market participants are looking to the RBA today, the technical landscape offers fresh resistance around key figure 0.70 applied to the H4 chart. Merging closely with a 61.8% H4 Fibonacci resistance value at 0.6992 and daily resistance offering a potential ceiling close by at 0.7003, this area likely has active sellers in waiting. What’s also notable from a technical perspective is the clear-cut downtrend since early 2018 and the H4 RSI indicator is visibly testing overbought waters.
The only drawback to shorting 0.70, according to our technical studies, is weekly price appears poised to drive above the psychological number and approach the 2019 yearly opening level at 0.7042.
Areas of consideration:
0.70, despite weekly price suggesting a move higher, remains a key point of interest today. For folks concerned by longer-term flows may want to consider waiting and seeing how H4 action behaves prior to selling 0.70. A H4 bearish candlestick pattern, for example – think shooting star formation or bearish engulfing pattern – not only helps identify seller intent, it also provides traders entry and risk levels to work with.
Today’s data points: Australian Retail Sales m/m; Australian Current Account; RBA Cash Rate and Rate Statement; RBA Gov Lowe Speaks; FOMC Member Williams Speaks; Fed Chair Powell Speaks.
In the early hours of Monday, the commodity-linked currency derived fresh impetus from better-than-expected Caixin PMI data out of China. Further buying materialised in US trade as unearthed speculations of a Fed rate cut on the back of comments from Chicago Fed President Bullard.
Although market participants are looking to the RBA today, the technical landscape offers fresh resistance around key figure 0.70 applied to the H4 chart. Merging closely with a 61.8% H4 Fibonacci resistance value at 0.6992 and daily resistance offering a potential ceiling close by at 0.7003, this area likely has active sellers in waiting. What’s also notable from a technical perspective is the clear-cut downtrend since early 2018 and the H4 RSI indicator is visibly testing overbought waters.
The only drawback to shorting 0.70, according to our technical studies, is weekly price appears poised to drive above the psychological number and approach the 2019 yearly opening level at 0.7042.
Areas of consideration:
0.70, despite weekly price suggesting a move higher, remains a key point of interest today. For folks concerned by longer-term flows may want to consider waiting and seeing how H4 action behaves prior to selling 0.70. A H4 bearish candlestick pattern, for example – think shooting star formation or bearish engulfing pattern – not only helps identify seller intent, it also provides traders entry and risk levels to work with.
Today’s data points: Australian Retail Sales m/m; Australian Current Account; RBA Cash Rate and Rate Statement; RBA Gov Lowe Speaks; FOMC Member Williams Speaks; Fed Chair Powell Speaks.
IC Markets is an online forex broker specialized in providing transparent trading solutions to both retail and institutional investors alike. We provide superior execution technology, lower spreads and unrivaled liquidity.