AUDUSD at Technical Juncture

For now at least… With not much happening domestically this week, the Aussie will have to settle for the plethora of US data lined up to move it. ​

 

audusd-min (1)

Two reversal candles last week below 73c warn of near-term weakness. After seeing an impressive move towards 73c last week the Aussie has now printed a wide ranging Spinning Top and Shooting Star candle. Yesterday’s bearish follow through confirmed the Shooting Star but has since found support on the May trendline.

Weekly ATR(14) suggests we could test either 70c or 73c again this week. Of course this is not precise but gives us a general feeling for potential movement taking underlying volatility into account. I have marked the chart with the purple prices.

audusd-min (2)
Whilst we sit around 71c I have no directional bias, so consider it to be a wait and see situation. Whilst we could see the break above the bullish trendline as a signal to buy, all too frequently I have seen price edge its way along this area making entry and stop placement tricky. However with the stack of data coming from the US and knowing the FED and markets are willing to place binary bets on the Greenback, it could make it for an easier week to trade as the data comes available and pick a longer-term direction.

House Price Indices from Australia and US are likely to be mooted so may have to wait until Wednesday and beyond to get more impressive volatility. We also have China’s Economic Index at 12pm today but again suspect this may be a non-event, due to the Hawkish comments from FED officials since the FOMC meeting last Thursday.

Wednesday to Friday have a host of US data to shake things up. Taking into account that the markets will continue to be data sensitive as traders try to decipher if FED will raise in October or December. At time of writing I suspect December but October is not out of the question, so any strength or weakness will see the markets sway back and forth between these two time horizons and USD will rise of fall off of the back of it.

Manufacturing data on Wednesday and Durable Goods orders will be of interest but the highlight of the week could be Friday as this present Yellen speaking, GDP, Inflation and Services PMI.

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