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Australian dollar strength continues in today’s session, and with top tier economic data coming from Australia soon, will the party keep going for Aussie bulls?

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on GBP/NZD ahead of mid-tier UK data, so be sure to check that out to see if there is still a potential play!

Equity Markets Bond Yields Commodities & Crypto
DAX: 10813.66 +1.44%
FTSE: 5958.62 +1.91%
S&P 500: 2880.28 +1.80%
DJIA: 24191.88 +0.24%
US 10-yr 0.622% -0.032
Bund 10-YR -0.469% -0.024
UK 10-YR: 0.286% -0.015
JPN 10-YR: -0.046 -0.022
Oil: 13.26 +3.76%
Gold: 1713.8 -0.58%
Bitcoin: 7750.77 -0.19%
Etherium: 196.44 +0.08%

Fresh Market Headlines & Economic Data:

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

  • API Crude oil inventory at 8:30 pm GMT
  • New Zealand Trade Balance at 10:45 pm GMT
  • Australia Inflation at 1:30 am GMT (Apr. 4/29)

What to Watch: AUD/USD

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

Global risk sentiment continues its upswing today with traders feeling the good vibes as economies around the world plan to re-open after an extended coronavirus lockdown.

This has benefited the Australian dollar as it tends to trade as a proxy to global risk sentiment and hurt the Greenback, the usual “safe haven” play. But will the trend higher continue?

Well, we’ve got top tier data from Australia in the form of the latest inflation update, so volatility is likely to pick up again for the Aussie soon, but it may be a good idea to wait for the actual numbers before shifting your bias one way or another on the AUD/USD pair.

For the bulls, a better-than-expected inflation read from Australia may draw in further AUD buying, at which point the pair looks like a buy from current levels (around 0.6500) down to the minor psychological level around 0.6450 where the pair consolidated in the last few sessions.

This area also lines up with the rising ‘lows’ pattern marked on the one hour chart above, and if we see Stochastic back in oversold territory in this scenario, the odds improve of support holding on the pair in the short-term.

For the bears, a disappointing inflation update could take the legs out of the Aussie rally in the short-term, and if we see a break below the rising ‘lows’ pattern marked above, it may be a good time to consider a short position in the pair, especially if global risk sentiment shifts back towards negative.

Keep in mind too that tomorrow is a big day for the Greenback with the latest FOMC statement coming, so it’s probably a good idea to keep a trade in this pair short-term or ready for a potentially big move in the Greenback tomorrow.