I’m seeing a simple triangle consolidation pattern on AUD/USD!
Can we still see a breakout before the trading week comes to a close?
Before moving on, ICYMI, yesterday’s watchlist checked out GBP/USD’s rising channel support bounce. Be sure to check out if it’s still a good play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. initial jobless claims slowed from 250K to 239K (240K consensus) in the week ending August 12
Philly Fed manufacturing index jumped from -13.5 to +12.0 vs. -9.8 forecast in August, reflecting a return to industry expansion
U.S. CB leading index down by 0.4% m/m as expected in July vs. previous 0.7% decline, marking its 16th consecutive monthly decline
Japanese national core CPI slowed from 3.3% y/y to 3.1% as expected in July, as unit labor costs are barely increasing
U.K. retail sales slipped 1.2% m/m in July vs. estimated 0.6% decline and earlier 0.6% uptick (downgraded from initially reported 0.7% gain)
Price Action News
It was another light day in terms of economic releases, leaving Asian session traders with not much to work with in terms of fundamental catalysts.
The dollar was mostly weaker early in the day, carrying on from its slump brought about by falling bond yields in the previous session. The PBOC set its yuan reference rate higher to support their currency, but this announcement barely made any waves in the FX market.
The U.S. currency managed to recoup some losses against its peers, such as the comdolls and European currencies, but sustained its slide versus the yen throughout.
Upcoming Potential Catalysts on the Forex Economic Calendar:
Eurozone final headline and core CPI at 9:00 am GMT
Canadian IPPI and RMPI at 12:30 pm GMT
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
AUD/USD: 15-min
This pair has formed lower highs and higher lows to consolidate inside a symmetrical triangle formation over the past few hours.
Price might be in for a breakout soon as it tests the triangle bottom. A break below the pivot point (.6410) and .6400 major psychological mark might be enough to confirm that Aussie bears are in control.
In that case, watch out for a sustained bearish move to the next downside targets, such as S1 (.6360) and S2 (.6320), or a drop that’s at least the same height as the chart pattern.
Similarly a break above the resistance around the .6425 level could be followed by a rally of the same size as the triangle, which spans roughly a hundred pips.
Do note, though, that there’s not much in the way of top-tier releases in the next few hours again, so we might simply see sideways price action for the remainder of the day.
