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A quick fall for AUD/USD on the Tuesday session brings traders to a broken minor resistance area. Will buyers step in here or is it more downside for the session?

Before moving on, ICYMI, today’s Daily London Session Watch list looked at an opportunity forming on GBP/CAD after a hit to Sterling on fresh Brexit developments ,  so be sure to check that out to see if there is still a potential play!

Intermarket Snapshot

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Fresh Market Headlines & Economic Data:

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

  • Fed Williams & Rosengren speech at 5:30 pm GMT
  • New Zealand Current account at 9:45 pm GMT
  • Japan Balance of trade at 11:50 pm GMT
  • Australia Westpac Leading index at 12:30 am GMT (Dec. 18)

What to Watch: AUD/USD

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

A somewhat dovish set of RBA meeting minutes and a round of negative risk sentiment (likely on the renewed possibility of a no-deal Brexit) has pushed AUD/USD lower to now test an area of broken resistance. The area around 0.6850 held off the bulls earlier in the month before being easily broken last week, so will it attract the bulls now? We don’t know, but with potential catalysts from upcoming Fed speak and more Australian economic updates later, there is a possibility that we could still see volatility for the time being.

If you’re a bull on the pair, the stochastic indicating oversold conditions at a strong area of interest is very attractive. And if we do see some dovish comments from Fed officials combined with a disappointing Australian leading index (maybe even some bullish U.S.-China trade developments), then this pair looks good to go for a short-term long positions, which the more attractive entry down around the major psychological level of 0.6800.

If you’re a bear on the pair, the short-term trend and risk sentiment is still in your favor so shorting from current levels up to the Monday highs is a reasonable entry strategy. But again with stochastic in oversold territory, you may want to wait for a bounce to get a better potential return-on-risk, which is a good idea with Federal Reserve members giving speeches in the afternoon U.S. trading session.