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Who’s up for a break-and-retest play?

AUD/USD just broke below its rising trend line support and could gather more selling energy for a downtrend.

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:

Australia’s MI inflation gauge dipped from 0.3% to 0.2% in Dec 2021

Australian building approvals rose 3.6% vs. 3.2% forecast, previous 13.6% slump

Virgin Australia cancels nearly 25% of flights in Jan and Feb

Taiwan tightens coronavirus restrictions, alerts heightened

Crude oil advances on supply concerns from Libya, Kazakhstan

Chinese property developer Shimao puts all projects on sale

Italy’s jobless rate improved from 9.4% to 9.2% in Dec

U.S. 10-year Treasury yields rise to pre-pandemic levels above 1.80%

Upcoming Potential Catalysts on the Forex Economic Calendar:

U.S. final wholesale inventories at 3:00 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

AUD/USD 1-hour Forex Chart
AUD/USD 1-hour Forex Chart

It’s a slow start to the week in terms of top-tier economic reports, so traders might take cues from market sentiment.

By the looks of it, risk-off vibes could stay in play since the Omicron variant is prompting another wave of restrictions in some countries.

Besides, the higher-yielding Aussie broke below its uptrend line against the Greenback, suggesting that a reversal from the climb is underway.

Before that happens, though, the forex pair might still retreat to the broken support zone that happens to line up with the 61.8% Fib and 200 SMA dynamic resistance.

Oh, and did I mention that a bearish moving average crossover recently took place?

If that ain’t enough to draw AUD/USD sellers out, then Stochastic turning lower from the overbought zone might!

The other Fib levels might be enough to keep gains in check also, possibly sending the pair back to the swing low around .7130 or lower.