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Checking out AUD/USD today as the traders push the pair to potentially retest a major falling trendline pattern ahead of top tier data from Australia.

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Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Forex Calendar:

  • Australia Services index at 11:30 pm GMT
  • Australian GDP q/q at 2:30 am GMT (Sept. 4)
  • China Caixin Services PMI at 2:45 am GMT (Sept. 4)
  • Various European Services PMI starting at 8:15 am GMT (Sept. 4)
  • U.K. Services PMI at 9:30 am GMT (Sept. 4)
  • European Retail Sales data at 10:00 am GMT (Sept. 4)
  • Canada Trade balance & Labor prductivity at 1:30 pm GMT (Sept. 4)
  • U.S. Trade Balance at 1:30 pm GMT (Sept. 4)

What to Watch: AUD/USD

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

Looking ahead on the economic calendar, it looks like the biggest potential catalyst for FX is the latest read on Australian growth, and with U.S.-China trade tensions on the rise, volatility in the Australian dollar looks like the best bet for trade opportunity over the next session. And we’ll pair that up with the  U.S. dollar as volatility stay bid as well on the same U.S.-China trade theme and the latest U.S. manufacturing sentiment data, showing weakness in the sector in August.  So, AUD/USD makes it to the top of today’s watchlist, and in terms of price action, we can see a potential technical setup already in the works.

The pair has been in a downtrend basically for all of 2019, but the momentum seems to have slowed significantly in August. While still in a downtrend last month, it was a slow grind lower (forming  a falling ‘highs’ pattern in the process) while finding major support around 0.6700. But the market is currently bouncing higher on USD weakness after a disappointing update in U.S. manufacturing conditions, pushing the market higher to potentially retest the falling ‘highs’ pattern.

If you’re a bear on AUD/USD, this bounce and retest of the falling ‘highs’ could be your opportunity to play the trend lower at a better price, so be on a lookout for bearish reversal patterns and the stochastic to move out of overbought territory before putting together your short position plan. And if Australian GDP disappoints, this could be the catalyst that could turn this back into a momentum trade as a weak GDP read will likely up the probability that the RBA could cut rates sooner than later.

If you’re a AUD/USD bull, you may want to wait for the scenario of an upside break of the falling ‘highs’ and a better-than-expected GDP read before taking a long position. Given the bearish rate cut expectations bias on the Aussie, it will likely have to take both factors for traders to get bullish on the market, even with USD weakness already in play.