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AUD/USD hits the watchlist ahead of a busy calendar for both currencies, and on price action that looks like it is ready to breakout one way or another.

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
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Fresh Market Headlines & Economic data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Fed Clarida speaks in New York at 5:00 pm GMT
  • Bank of Canada Wilkins speaks at 7:15 pm GMT
  • Japan industrial production, unemployment rate & retail sales at 12:50 am GMT (May 31)
  • China manufacturing & non-manufacturing PMI at 2:00 am GMT (May 31)
  • Australian private sector credit at 2:30 am GMT (May 31)
  • U.K. M4 money supply, mortgage approvals & net lending at 9:30 am GMT (May 31)
  • Canada GDP and producer prices at 1:30 pm GMT (May 31)
  • U.S. Core PCE price index, and personal spending & income at 1:30 pm GMT (May 31)
  • U.S. Chicago PMI at 2:45 pm GMT (May 31)
  • U.S. UoM consumer sentiment at 3:00 pm GMT (May 31)

What to Watch: AUD/USD

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

Friday’s economic calendar looks pretty busy for AUD/USD as the U.S. will be giving us a couple of top tier catalysts (core PCE price index & consumer sentiment) for potential volatility, while the Aussie could be a mover on the latest Chinese manufacturing & services PMI data. And with AUD/USD in a tight range of around 30 – 40 pips over the last five sessions, we could have a potential consolidation breakout opportunity in the works.

For the bulls, that 0.6935 area has been tough to crack, but with a positive surprise from China on PMI’s, we could finally see an upside breakout. If that is the scenario that plays out, keep in mind the pair is in a longer-term downtrend and that the daily ATR is only around 40 – 50 pips. So taking a quick profit might be the prudent thing to do, especially given that the next strong area of interest for potential resistance isn’t too far away at 0.7000.

For the bears, a downside break is the higher probability play given the downtrend and the recent weakness in global economic data updates (especially in the Aussie updates seen above), so a breakdown of the 0.6900 area on weak Chinese updates and better-than-expected U.S. data is a high probability setup with a good potential reward-to-risk if the 0.6870 area breaks as well, as there doesn’t look like we have any potential support areas after that swing low ahead for now.