AUD/USD is hanging out at the very bottom of its rising channel!
Will buyers defend support or will risk-off flows spur a breakdown?
Before moving on, ICYMI, yesterday’s watchlist checked out GBP/JPY’s range resistance after the downbeat U.K. CPI release. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. Dec headline and core retail sales slumped 1.1% m/m
U.S. Dec headline producer prices fell 0.5% vs. projected 0.1% dip
U.S. Dec industrial production down by 0.7% m/m in vs. estimated 0.1% decline
API crude oil inventory report showed 7.6M build vs. expected draw
NZ PM Ardern announces surprise resignation by Feb 7
Australia’s Jan MI inflation expectations index accelerated from 5.2% to 5.6%
Australian economy lost 14.6K jobs in Dec vs. projected 26.5K gain
Australia’s Dec jobless rate held steady at 3.5% vs. estimated dip to 3.4%
ECB head Lagarde’s speech at 10:30 am GMT
ECB monetary policy meeting accounts at 12:30 pm GMT
EIA crude oil inventories at 4:00 pm GMT
FOMC member Brainard’s speech at 6:15 pm GMT
FOMC member Williams’ speech at 11:35 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/USD
AUD/USD 1-hour Forex Chart by TradingView
Markets have been in a sour mood after the U.S. printed downbeat retail sales and PPI data. It didn’t help that the Land Down Under released a dismal jobs report, too!
These were enough to drag AUD/USD all the way down to the bottom of its ascending channel visible on the hourly time frame.
Can the floor still hold?
Technical indicators seem to be suggesting so, as the 100 SMA is above the 200 SMA while Stochastic is indicating oversold conditions.
This means that bullish momentum is still in play and that exhausted sellers might need to take a break soon. If buyers take over, AUD/USD could make its way back up to nearby resistance levels.
I’m eyeing the top of the channel at the .7100 major psychological level or the mid-channel area of interest at the .7000 mark as potential upside targets.
But what if the pair breaks lower?
The next potential floor seems to be located at the .6700-.6700 region, which is close to a couple hundred pips from current levels.
Better stay on the lookout for more bearish candlesticks confirming a breakdown!
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