The AUDUSD technical pattern is in a bullish sequence since the beginning of the year, however the rally has run too fast in a very short period of time. Several technical indicators suggest the AUDUSD is in overbought territory in multiple time frames. What gives us confidence that we’re about to reverse the prevailing trend are the fundamentals.
The RBA is scheduled on Tuesday to announce its interest rate decision and while the market consensus is for no change in the monetary policy the soft landing in the housing market can push the RBA to signal rate cuts. On Thursday the RBA Governor Lowe is due to speak at the A50 Australian Economic Forum Dinner, in Sydney and traders need to pay close attention to his remarks at this event is highlighted as having a high impact on the market.
On the technical side, we can expect a false break above 0.7695 last week’s high and only a daily close above this figure can invalidate the bearish case. To the downside we have 0.7600 as intraday support, but more importantly, we have 0.7525 followed by the big psychological number 0.7500. Only a daily close below this figure can indicate that the AUD/USD can be in the process of a much deeper retracement.
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AUDUSD Weekly Forex Forecast – 6th to 10th Feb 2017 – Bearish