I’m having another look at this consolidation pattern on AUD/USD and waiting for a breakout this time.
The Land Down Under printed stronger than expected retail sales data during the Asian session, so Aussie bulls might keep charging.
Before we check out the chart setup, here are the major headlines you might have missed in the last few hours:
Currency Snapshot
Fresh Market Headlines & Economic Data:
- U.S. economy added 4.8M jobs in June, May reading upgraded to show 2.7M gain
- U.S. unemployment rate improved from 13.3% to 11.1% vs. 12.4% forecast
- Australia’s AIG construction index rose from 24.9 to 35.5
- U.K. GfK consumer confidence index up from -30 to -27 vs. -29 forecast
- Australian retail sales increased by 16.9% after earlier 16.3% gain
- Chinese Caixin services PMI improved from 55.0 to 58.4
- U.S. coronavirus cases up by record 55,000 in a single day
- Asian markets close in the green on global recovery hopes
Upcoming Potential Catalysts on the Economic Calendar:
- Eurozone final services PMIs due starting 8:15 am GMT
- U.K. final services PMI at 9:30 am GMT
What to Watch: AUD/USD
Traders were hungry for more risk in the earlier trading session as headlines focused on the economic rebound in the U.S. and China.
The Aussie even got an extra boost from stronger than expected retail sales figures, which reflected a pickup in consumer spending as more businesses reopened in the past months.
There’s not much in the way of major catalysts in the London session, so this kind of sentiment could carry on for the rest of the trading day.If so, AUD/USD could surge past the top of its symmetrical triangle and go on a climb that’s at least the same height as the chart formation. Note that the chart pattern spans around 300 pips from .6750 to .7050.
A return in risk aversion, on the other hand, could mean another test of the triangle support. Keep in mind that traders might also be keen on booking profits ahead of the Fourth of July festivities this weekend.
Whichever direction you’re thinking of playing, make sure you incorporate the average AUD/USD volatility in setting entries and exits!
