AUD/USD rally is running out of steam, so selling with a break preferred.
The Australian dollar traded lower against the US dollar after the disappointing employment report in the Australia. However, the pair recovered some of the lost ground heading into the weekend. It looks like the pair is topping in the short term and is also forming a head and shoulders pattern, which could initiate a sharp decline in the pair. So, selling looks like a good option in the short term.
There is a bullish trend line on the 4 hour chart for the AUD/USD pair. Also, there is an important support level at around the 0.9350 area, which also coincides with the mentioned trend line. If the pair manages to trade lower, break the trend line support area and closes below it, then we can enter into a sell trade. Remember, the pair has to respect the last high for this trade setup to be valid.
Initial target should be around the 0.9260 level, and final target could be around the 0.9220 level. Stop should be placed above the 0.9420 level.
The US dollar mostly consolidated against few major currencies and traded lower against the Japanese yen. The FOMC meeting minutes were the highlight of this past week, which were mainly in the favor of the US dollar. However, the US dollar failed to take the advantage of the same and traded lower initially. The USD/JPY traded a lot lower this past week, but heading towards an important support area. There are some global tensions surrounding, which can cause some volatility in the market during the upcoming week. So, we need to be cautious while trading and watch the incoming data and news carefully.
Let us look at all major events lined up in the upcoming week.
Sunday – No Economic release.
Monday – Euro zone industrial production data, ECB President Draghi speech and RBA meeting minutes.
Tuesday – BOJ interest rate decision and press conference, Italian CPI, UK CPI and PPI data, German ZEW economic sentiment, BOE Governor Carney speech, US retail sales data, Fed chair yellen speech, New Zealand’s CPI data and Chinese GDP data.
Wednesday –UK employment report, US PPI data, BOC interest rate decision and fed’s beige book.
Thursday – Euro zone CPI data, US building permits, US housing starts, US initial jobless claims and Philadelphia fed manufacturing index.
Friday –Euro zone current account data, Canadian CPI data and Michigan consumer sentiment.