AUD/USD is falling sharply after getting rejected at the .6900 resistance!
Are we looking at a reversal?
Or are AUD bulls just taking a breather?
AUD/USD: 1-hour
As you can see, there were enough bears at the .6900 psychological handle to prevent AUD/USD bulls from extending a sharp July upswing.
The pair is now trading just above .6800, which is right around a 38.2% Fibonacci retracement and the Pivot Point level (.6780) on the 1-hour time frame.
Are we looking at a pullback? Or is AUD/USD ready for a reversal?
Given how the markets reacted to weak U.S. inflation and slightly weaker Chinese data dump, it looks like the markets are happy to price in “peak inflation” and “peak interest rates” from the major economies and their central banks.
But this week’s data releases could influence the depth of AUD/USD’s downswing before it sees enough buying pressure.
Growth concerns could gain traction if this week’s U.S. retail sales and earnings data paint a picture of weakening growth trends.
Meanwhile, Reserve Bank of Australia’s (RBA) meeting minutes and Australia’s jobs data could underscore the RBA’s need to pause its rate hikes.
If today’s cautious mood, RBA meeting minutes, and U.S. retail sales releases weigh on risk assets like AUD, then AUD/USD coudl dip to not only the .6800 Pivot Point level but also the .6750 zone or even the .6700 trend line support area.
But if this week’s catalysts extend last week’s risk-friendly mood, then AUD/USD could extend its uptrend without visiting the pullback areas that we’ve marked.
What do you think? How low can AUD/USD go before seeing extended buying pressure?
