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Risk-on sentiment and U.S. dollar weakness continues to dominate FX behavior, so we’re checking out the simple uptrend in AUD/USD on the one hour chart for a potential short-term setup!

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/CAD as risk-on sentiment dominates, so be sure to check that out to see if there is still a potential play!

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Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar for U.S. & Asia:

  • Fed Evans speech at 4:30 pm GMT
  • API Crude oil inventory change at 8:30 pm GMT
  • Australia Consumer confidence at 12:30 am GMT (Apr. 15)

What to Watch: AUD/USD

AUD/USD 1-Hour Forex Chart
AUD/USD 1-Hour Forex Chart

Not much on the economic calendar ahead in terms of top tier events, but we do have events from Australia (consumer confidence) and the U.S. (Fed Evans speech) to potentially bring in a small volatility boost to AUD/USD.

This is a great pair to throw up on the watchlist as it seems to be flowing with the big FX themes driving the markets at the moment, which seem to be U.S. dollar weakness (thanks to massive stimulus from the Fed) and risk-on sentiment as it seems we may be passing the worst of the pandemic and countries contemplate loosening up on social lockdowns.

On the one hour chart above of AUD/USD, we can see the pair has been riding this sentiment higher over the the past week, so the trend is your short-term friend here if you’re bullish on the pair.

If so and you trade on the more conservative end of the risk spectrum, consider waiting for a pullback, potentially on some likely bad Australia consumer confidence data ahead. If the market drops and finds support around the rising trendline and minor area of interest (around the 0.6375 area) then the odds rise of a potential return to the uptrend.

For the more aggressive, going long at market or scaling into a long position from current levels down to  0.6375 makes sense if you don’t think a deep pullback is lying ahead.

For the bears on AUD/USD, waiting for a break of the rising trendline makes sense from a technical perspective, but it’s a low probability trade to short unless we do see a broad risk sentiment shift to negative on the session.

If so, it could pull in fresh sellers and/or profit takers, making the daily ATR of around 130 pips a tool to consider to set an initial target for a short-term play.