Can forex bulls keep up the momentum?
Before we check out AUD/USD’s setup, you might want to review the top headlines in the last couple of hours:
- U.S. new home sales surge to highest level since before the Great Recession
- U.K.: Consumers unwilling to spend as Christmas quarter approaches
- Fed’s Evans says U.S. taking unnecessary risks with lack of more fiscal aid
- Fed’s Bullard says U.S. economy within reach of full recovery this year
- Mnuchin, Powell say some $380 billion in unused aid could help U.S. economy
- Commonwealth Bank of Australia expects steady policy rates in October
- Japan corporate service prices drop for 6th month
- China is set to join FTSE Russell’s flagship global bond index next year
- Asian shares rise on tech rally, renewed stimulus hopes
Upcoming Potential Catalysts on the Economic Calendar:
- U.K.’s public borrowing at 6:00 am GMT
- BOE’s quarterly bulletin at 11:00 am GMT
- U.S. durable goods numbers at 12:30 pm GMT
What to Watch: AUD/USD
As you can see, .7050 is a key inflection point for AUD/USD. Not only that, but Stochastic is already signaling the pair’s oversold conditions on the daily time frame.With no top-tier reports on the docket, the investors’ attention will likely focus stimulus promises that could help boost even economies that are experiencing fresh waves of COVID-19 infections.
If London session traders take cues from their U.S. and Asian counterparts, then we could see .7050 hold as support and push AUD/USD to the .7100 handle before the week ends.
A much lower durable goods report from the U.S., however, could bring back fears of a slower global economic recovery and drag AUD/USD below the 100 SMA on the chart.
Keep in mind that AUD/USD has an average daily volatility of around 60 pips, so it’s also possible that we’ll see limited movements for the rest of the day if there are no fresh catalysts to rock the markets.