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Risk appetite was the name of the game during the Asian session thanks to speculations that the U.S. will see a stimulus deal some time this week.

Will this translate to a longer-term bounce for AUD/USD?

Check out the top Asian session headlines before you place any orders today!

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Upcoming Potential Catalysts on the Economic Calendar:

  • U.K. inflation numbers at 7:00 am GMT
  • U.K. PPI at 7:00 am GMT
  • U.K.’s public borrowing at 7:00 am GMT
  • Canada’s inflation report at 1:30 pm GMT
  • Canada’s retail sales at 1:30 pm GMT

What to Watch: AUD/USD

AUD/USD 4-hour Forex Chart
AUD/USD 4-hour Forex Chart

With not a lot of market-moving headlines printed, Asian session traders caught up to their U.S. counterparts and bought high-yielding currencies like the Aussie and Kiwi in the anticipation of a stimulus deal in the U.S.

The optimism pushed AUD/USD more than 60 pips higher in the last couple of hours. Question is, can the bulls maintain their momentum?

Keep in mind that AUD/USD only has an average volatility of 65 pips on Wednesdays. That means it might take a fresh wave of buying or another bullish headline for the comdoll to make new daily highs.

Aussie bulls will be happy to know that AUD/USD has recently bounced from a key inflection point after the pair sported a bullish divergence on the 4-hour time frame. If AUD/USD breaks above the .7100 immediate resistance level, then we could be looking at a trip to the .7150 or .7200 previous areas of interest.

But what if the tides turn for the comdolls? If AUD/USD finds resistance at .7100, then the comdoll could return to its .7025 support and even make a play for a downside breakout.