Missed the breakout on AUD/USD?
You see, the pair already busted through the neckline of its double bottom pattern last week, suggesting that an uptrend might be in the cards.
There might be another chance to catch the reversal if you’re still bullish on this one!
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Aussie and U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
AUD/USD 4-hour Forex Chart by TradingView
Risk-taking seems to be lifting the higher-yielding Aussie against the safe-haven dollar so far this month, as equities and commodities also had a good run recently.
Mostly downbeat U.S. economic data released in the past week also appear to be throwing cold water on the Fed’s relatively hawkish outlook while some green shoots in China’s data could be enough to keep investors in an optimistic mood.
Can AUD/USD sustain its rallies in the next few days, though?
The U.S. dollar has a lot to contend with this week, including the CPI, PPI, and retail sales figures lined up midweek, followed by the preliminary UoM consumer sentiment index for the current month.
Another batch of downside surprises might revive Fed rate cut hopes for May, possibly translating to a strong bearish wave for the Greenback while also propping riskier currencies higher.
AUD/USD might still have room to pull back ahead of these top-tier data points, as the Fib retracement tool shows that the 38.2% level coincides with the former double bottom neckline near the .6600 handle.
Stochastic is just heading south from the overbought zone, though, so there may be plenty of room for a retracement until the oscillator reaches the oversold area to reflect exhaustion among sellers.
A larger correction could reach the 61.8% Fib, which happens to line up with the dynamic support at the moving averages. Oh, and did I mention that the 100 SMA is working on a bullish crossover from the 200 SMA, too?
If the area of interest is able to attract Aussie bulls, the pair might recover to the swing high at .6668 or up to the bullish targets at R1 (.6700) then R2 (.6780).
Do you think this Aussie pair can carry on with its climb?