Technically the AUD is at an interesting juncture awaiting the next catalyst; luckily there is lots of AUD and USD news this week to help it decide a direction.
Last week finally saw the much below 0.925 support to test 0.920 in a blink of an eye following the NFP release to present us with a Rikshaw man Doji. The high of the week was capped by the 50 week eMA with the low being the psychological round number and the 50% Fibs retracement. Also note last week's low confirmed a bullish trendline to provide a near-term bullish bias.
Following the disappointing CPi results price has ranged within a 90-pip range until Friday;s NFP which also produced a Bullish Pinbar Candle. When you see a strong sell-off and quick reversal it tells us the level it rejects is significant and increases the odds of a a swing low. Price currently holds above the 200 day eMA and 0.925 support to strengthen the near-term bullish bias, but I would like to see a break above 0.932 high before confirming a resumption of the bullish trend.
- A break above 0.932 confirms resumption of bullish channel
- A break below 0.925 invalidates the bullish channel, hnowever we need to see a break below 0.920 before becoming too bearish
- With the RBA cash rate shortly pretty much guaranteed to be fixed at 2.5%, the accompanying statement is more likely to cuase some volatility if the market deciphers clues from the RBA regarding interest changes in future, or a reassesment of inflation forecasts.