AUD/USD trading points analysis
- Markets rejected the Australian Building Permits data.
- Upcoming data this week will force the AUD/USD.
- The breakout of the falling wedge of the AUD/USD currency pair may be cut this week.
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Australian dollar basic background
The Australian dollar extended its gains from last week as risk sentiment improved after the Nonfarm Payrolls report. AUD/USD will be affected by two major announcements, including the US Consumer Price Index and Australia’s 2023 Federal Budget. Treasurer Jim Chalmers will be in the spotlight with a focus on a cost-of-living package intended to help mitigate the impact of inflationary pressures.
Today’s data centered around the Australian housing markets but with mixed data, the Australian dollar largely rejected the release and responded to dollar weakness. Additionally, Australian commodity exports increased slightly which includes wheat, iron ore, and gold to name a few. Given that many markets are off today, liquidity is likely to remain thin with low trading volumes. In the absence of surprise announcements or data, the price movement of the AUD/USD pair should remain in a relative range and be influenced by technical factors.
Foundational knowledge of the trade
Commodity trading
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Economic calendar
source: DailyFX Economic Calendar
Technical Analysis
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AUD/USD daily chart
Infographic by Warren Venketas, IG
The breach of the recent falling wedge (black) pattern on the AUD/USD daily chart could be room for more bullishness, but if the US CPI comes out hotter than expected, the bears could jump back into the market and target the moving average 200 days (blue) once more.
Key resistance levels:
Key support levels:
IG Customer Sense Data: Surprising
The IGCS shows that retailers are currently on board long On AUD/USD, with 51% of traders who are currently holding long positions. At DailyFX, we usually take a contrarian view of the resulting crowd sentiment but due to the recent changes in long and short positions, we are reaching a short-term bullish bias.
Contact and follow Warrenon Twitter: @WVenketas
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