Take a look at this classic chart pattern on the 4-hour time frame of the AUD/USD pair!
Is the pair preparing for a breakout soon? Or are we about to see more consolidation?
These are the near turning points I’m watching.
AUD/USD currency pair on 4-hour chart Chart by TradingView
This Australian currency pair formed higher lows and found resistance at the key psychological level of 0.6700, creating an ascending triangle pattern that has been in place since mid-May.
The price appears to be trying to make an upside breakout that would trigger an upside rally at the same height as the formation, which spans nearly 150 pips.
But can she keep up the pace?
Remember that directional biases and volatility in market prices are usually driven by fundamentals. If you haven’t done your homework on the AUD and USD yet, it’s time to check out the economic calendar and stay up to date with the daily fundamental news!
Dollar traders appear to be anxiously awaiting the U.S. non-farm payrolls report, as it could have strong implications for Federal Reserve policy. Remember, FOMC minutes revealed that policymakers are increasingly concerned about weaknesses in the labor market, so a missed NFP report could revive calls for further easing.
However, an upside breakout in AUD/USD could take the pair to the next upside targets at R2 (.6730) and then R3 (.6770), especially since the pair is already trading above the moving averages to confirm the bullish momentum.
On the other hand, a return of USD strength could drag AUD/USD to the bottom of the triangle at S1 (.6630) or even to a downside drop to the next downside targets at S2 (.6590) and then S3 (.6560).
Are you trading on Friday’s US non-farm payrolls report? Which way do you think this pair will go?