After breaking a key support zone, AUD/USD has gained some pips and is now knocking on an inflection point.
Are we looking at the start of a trend for AUD/USD?
Or will the pair return to its range?
AUD/USD 1-hour Forex Chart by TV
October has been a good month for the Australian dollar so far, as AUD/USD has clawed its way from its .6300 to retest a technical support that was broken in late September.
If you haven’t read the latest Global Market Weekly Recap, you should know that the U.S. dollar lost some of its recent gains over “soft landing” bets for the U.S. economy.
Can AUD/USD maintain its gains? Keep in mind that traders from China are back from their week-long holiday and, unfortunately, they woke up to a geopolitical conflict in Israel.
Meanwhile, this week’s FOMC meeting minutes and U.S. CPI reports could remind traders that the Fed is still pricing in at least one more interest rate hike this year.
Unless we see a game-changing catalyst, “risky” bets like AUD may continue to face selling pressure against safe havens like USD.
AUD/USD, which already got rejected at the .6400 psychological level near the Pivot Point line, may see enough bearish momentum all the way to the .6300 previous lows.
If you believe that AUD/USD is sporting a break-and-retest opportunity, then you can consider selling somewhere between the current prices and the .6400 resistance throughout the week.
The .6300 S1 Pivot Point and previous support level looks good as an initial target though you can also aim for new monthly lows if there’s enough momentum between the FOMC minutes, U.S. CPI, and China’s CPI and PPI releases.
Good luck and good trading this one!
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