Is AUD/USD ready for a bullish reversal?
With not a lot of economic reports on tap, I’m setting my sights on risk-taking possibly busting AUD/USD out of its Reverse Head and Shoulders pattern.
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Oil, Asian currencies drop as China sticks to zero-Covid policy
China’s trade surplus at $85.2B, little changed from $84.8B in October 2021, as exports fell (-0.3% y/y) for the first time since May 2020
Germany’s industrial production up by 0.6% m/m in September after 1.2% decline in August
Halifax: UK house prices dropped by 0.4% in October, the fastest monthly rate since February 2021
European stocks set for lower open on China’s Covid policies
ECB President Lagarde to give a speech at 8:40 am GMT
Fed member Mester to participate in a moderated discussion at 8:40 pm GM
Fed member Collins to give a speech at 9:30 pm GMT
AU AIG services index at 9:30 pm GMT
AU Westpac consumer sentiment at 11:30 pm GMT
Japan’s household spending and cash earnings at 11:30 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
We don’t have a lot of top-tier reports on the docket today but that doesn’t mean we won’t see major volatility!
AUD/USD, in particular, could see tons of action as traders price in China reaffirming its zero-Covid strategy.
That likely won’t stop AUD bulls as they also consider Uncle Sam’s latest jobs data and the possibility of the Fed not adjusting its terminal rate much higher after all.
Until we see more bearish headlines, AUD/USD could continue its upswing from .6300. It could even break above its Reverse Head and Shoulders pattern on the daily!
A break above the .6500 “neckline” could bump AUD/USD all the way to the .6700 zone near the 100 SMA and broken support zone.
But if the U.S. midterm elections cause uncertainty, or if this week’s headlines put the spotlight back on global growth concerns, then AUD/USD could extend its downtrend.
AUD/USD could find resistance at .6500 and head for its previous lows near .6300 or .6200.