AUDUSD Technical Analysis – Breakout or fakeout?


Yesterday, the USD
weakened across the board following a benign US
report where the data came in line with expectations. The market firmed
up the rate cuts expectations with September and December now fully priced in. We
saw a general risk-on sentiment as a result and barring negative surprises in
the following days and weeks, this trend might have some more legs.

The AUD, on the other
hand, came a bit under pressure following the Australian labour
data tonight but this might be just a dip-buying opportunity for the
bulls as the risk sentiment and general US Dollar weakness should support the
pair into new highs.

AUDUSD Technical
Analysis – Daily Timeframe

On the daily
chart, we can see that AUDUSD yesterday finally broke above the key resistance
zone around the 0.6650 level following the US CPI report. The technical trend
remains bullish as the price continues to print higher highs and higher lows.

The support from the
benign US CPI figures and the breakout should see the buyers piling in to
position for a rally into the 0.6870 level. A break below the trendline
should invalidate the bullish case and see the sellers taking control.

Technical Analysis – 1 hour Timeframe

On the 1 hour
chart, we can see that the price pulled back tonight following the
disappointing Australian jobs data. We are now near the minor trendline and the
This is where the buyers will likely pile in with a defined risk below the
support zone and position for a rally into the 0.6870 level.

The sellers, on
the other hand, will want to see the price breaking below the support to start
stepping in and increase the bearish bets in case the price falls below the
major trendline around the 0.66 handle.


Today the US Jobless Claims figures will take the centre
stage as the market will want to see if the last week’s numbers were the start
of a trend or just a blip.

This article was written by Giuseppe Dellamotta at Source