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For today’s watchlist, we’ve got a simple technical restest setup on AUD/USD after a resistance break this week.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 11931.03 +0.21%
FTSE: 7410.73 -0.15%
S&P 500: 2889.51 +0.05%
DJIA: 26178.60 +0.08%
US 10-yr 2.499% +0.022
Bund 10-YR -0.015% +0.018
UK 10-YR: 1.14% +0.044
JPN 10-YR: -0.06% -0.013
Oil: 64.12 -0.76%
Gold: 1302.20 -0.89%
Bitcoin: 5021.08 -5.66%
Etherium: 162.09 -8.63%

Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Fed Quarles participates in FSB roundtable at 4:50 pm GMT
  • Bank of Canada’s Wilkins attends panel at 6:00 pm GMT
  • Fed Bowman speaks in San Francisco at 9:00 pm GMT
  • New Zealand manufacturing index at 11:30 pm GMT
  • New Zealand visitor arrivals at 11:45 pm GMT
  • ECB’s Enria speaks in Washington at 12:00 am GMT (Apr. 12)
  • Chinese trade balance (tentative Apr. 12)

What to Watch: AUD/USD

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

This week AUD/USD was able to break above the strong area of interest around the .7130 handle, and make an additional move as high as .7175 before sellers took back control. The pair is now about to retest the broken resistance level, which also lines up with the rising ‘lows’ pattern drawn on the chart above. We can also see the stochastic indicating that today’s fall may be a bit over done, which could draw in technical buyers pretty soon.

Looking forward, we’ve got additional Fed speak later on today from Federal Reserve Governor Michelle Bowman that could shake up the Greenback, and in the Friday morning Asia session, the Chinese trade balance data could make waves for the Aussie if we get any big surprises.

For the bulls, dovish Fed comments and a positive surprise from the Chinese trade data could lift AUD/USD higher, so look out for reversal patterns back to the upside from the broken resistance around .7130 down to the previous swing low around .7110. For the bears, a Fed rate hike rhetoric and weaker Chinese trade balance scenario should go on the watchlist with a momentum break of the rising ‘lows’ pattern. The daily ATR for this pair is around 50 – 60 pips, which makes a trade in either direction a rough 1:1 potential return-on-risk if using the ATR for your stop and the previous swing high (about .7175) and strong support area (around .7070) as your potential exit targets.