This forex pair is in correction mode and might find sellers at these nearby inflection points.
On the hourly time frame below, you can see that AUD/USD is cruising below a falling trend line that’s been holding so far this month.
Can the upcoming U.S. PMI figures let the downtrend gain traction?
AUD/USD 1-hour Forex Chart by TV
Earlier today, Australia already released its own flash PMIs for August, and the results weren’t so good.
The manufacturing sector reported a dip from 49.6 to 49.4 while the services industry saw a decline from 47.9 to 46.7, both reflecting a sharper pace of contraction.
Later on, the U.S. economy will print its own PMI figures and probably report slower business activity as well. However, upside surprises might be enough to boost USD across the board on September hike expectations and risk-off flows.
Keep in mind that 10-year U.S. bond yields are already on the rise, so another batch of strong U.S. data could be enough to extend the rally to fresh highs.
If that’s the case, AUD/USD could retreat from these resistance levels visible on the hourly chart. In particular, sellers could hop in at the 38.2% to 50% levels that span an area of interest near the trend line, former .6500 support zone, and R1 (.6490).
Technical indicators are already reflecting the presence of bearish vibes, as the 100 SMA is below the 200 SMA while Stochastic is on the move down.
If any of the upside barriers hold, watch out for a move back to the swing low at .6366 or down to S1 (.6340). The line in the sand for a bearish pullback might be the 61.8% Fib at .6521, as a move above this could signal a trend reversal.
Don’t forget to account for the average AUD/USD volatility when trading this one, too!
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.
Comments are closed.