AUD/USD technicals ahead of Aussie data...

Optimism continued to surface in recent trade after White House Economic adviser Kudlow announced positive talks with China. In response, the AUD/USD concluded Tuesday’s session up 0.63% and pared all of Monday’s losses.

From a technical perspective, this has seen weekly action respect its 2017 yearly opening level at 0.7199. Room for further buying is also visible on this scale towards the 2016 yearly opening base at 0.7282. Daily price also found support just north of 0.7151 and its closely positioned channel resistance-turned support (taken from the high 0.8135). The next upside target on this scale, however, falls in around 0.7304: a Quasimodo resistance level.

H4 action has recently crossed above its October opening level at 0.7229. Nearby supply (marked red) appears fragile given it has already been tested. For that reason, sellers are likely weak here. Beyond this point, traders’ crosshairs will be fixed on the Quasimodo resistance at 0.7283, followed closely by the 0.73 handle.

Areas of consideration:

All three timeframes point to further buying at the moment. In order to confirm this, however, traders are urged to wait for a H4 close to form above October’s opening level at 0.7229. This – coupled with a retest of this level as support in the shape of a bullish candlestick formation – would likely be enough to draw in buyers and push for the H4 Quasimodo resistance level mentioned above at 0.7283.

Today’s data points: Wage Price Index q/q; China Fixed Asset Investment ytd/y; China Industrial Production y/y; US CPI m/m/Core CPI m/m; FOMC Member Quarles Speaks.