China, one of Australia’s largest trading partners, is releasing another batch of economic data!
Not only that, but the FOMC gang will be appearing all over our charts this week as a couple of the members share their political biases and possibly provide clues to the next voting decisions.
Will this week’s events push AUD/USD out of its range? Or will the pattern hold?
Before checking setup, make sure you know all the The main market movers last week So is this week potential market catalysts!
AUD/USD for 4 hours Planned by TV
The past week was not a good one for the AUD/USD pair, which was rejected at the key psychological handle of 0.6800 before falling all the way to the current 0.6650 levels.
The pair also broke below the 0.680 medium term support area, opening a downward move to the 0.6580 range support area that has held at least twice since March.
Let’s see if the bears on the Australian dollar have enough momentum to reach the previous support levels.
China – one of Australia’s largest trading partners – is printing a batch of high-profile economic reports this week. The lack of data on production and consumption could reignite concerns about the pace of the global economic recovery post-COVID.
Meanwhile, a number of FOMC members are scheduled to deliver speeches. Judging by statements by Bowman and Williams last week, Fed members remain largely bullish on when markets will actually price in a pause or rate cut this year.
AUD/USD could drop another 50 pips or so and already reach the 0.6580 support area.
Before you sell the AUD/USD like there is no tomorrow, you should also notice that the stochastic is already showing an “oversold” signal.
Until we see China numbers, or until we hear more hawkish FOMC comments, AUD/USD could reverse some of its losses and retest the mid-range area.
AUD/USD can retest 6750 without reaching 6580 support!
For now, I will be looking for shorting opportunities until AUD/USD hits 0.6580. Next, I will take a look at the data dump in China and the first FOMC speakers to see if the AUD/USD could have enough momentum to break down or if we can price in a bounce range.
what do you think?