The AUDUSD technical pattern is signaling a major reversal unfolding. We can spot a massive bearish divergence between the price and the stochastic indicator. For confirmation, we need a break below 0.7525 but more important a break and a daily close below the 0.7500 big psychological number. To the upside last week high 0.7600 should act as resistance.
The Chinese manufacturing activity is a proxy risk event that can drive up the AUDUSD volatility. On Wednesday, the NBS Manufacturing PMI is expected to inch lower to 51.2 while on Friday the Caixin Manufacturing PMI is also expected to come down from 51.9 to 51.7 signaling an economic slowdown in the world’s second largest economy which can negatively impact the AUD/USD.
The Australian Trade Balance which posted the first trade surplus in years is also scheduled to be release on Wednesday, but since much of it was attributed to the rise in commodity prices we can expect a down tick in Trade Balance which can be bearish for AUD/USD.
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AUDUSD Weekly Forex Forecast – 23rd to 27th Jan 2017 – Bearish