The U.S. advanced GDP report is coming up today!
Will downbeat growth figures spur a reversal on AUD/USD?
Check out this chart pattern and inflection points I’m watching on the hourly chart.
AUD/USD 1-hour Forex Chart by TV
It looks like Aussie bears are struggling to take this pair below the .6725 support area!
Price is now testing the double bottom neckline at the .6800 major psychological mark and R1 (.6810), and a break higher could confirm that a reversal from the selloff is underway.
In that case, AUD/USD could climb by the same height as the chart formation, which spans roughly 75 pips.
This should be enough to take it close to the next upside barrier at R2 (.6890) or even higher, but it’s also worth noting that the pair moves an average of 65.5 pips per day.
Technical indicators aren’t so sold on a bullish run, though. Stochastic is already in the overbought region to suggest that buyers are exhausted, but the oscillator has yet to move south to confirm that sellers are back.
A move below the pivot point (.6770) could be enough to show that Aussie bulls aren’t ready to charge yet.
The 100 SMA is below the 200 SMA to suggest that bearish pressure is in play, but the pair has climbed above both indicators as an early signal of bullish vibes.
It looks like the prospect of additional stimulus from China is enough to keep commodity currencies and other risk assets afloat for the time being. Meanwhile, the Fed’s stubbornly hawkish bias seems to be doing more harm to the dollar than good, as traders are wary of U.S. recession risks.
The upcoming U.S. advanced GDP report is worth keeping tabs on when trading AUD/USD, as weak growth figures might discourage the Fed from tightening further.
Do you think this pair is in for more gains from here?
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