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Volatility picked up this session with the Dollar leading the way as a gainer against the other major currencies, including the Aussie dollar.

Is that an opportunity to play the uptrend in AUD/USD at better prices, or does the Greenback have legs for further upside?

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on EUR/USD as the pulls back from an uptrend, so be sure to check that out to see if there is still a potential play!

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 13236.75 +2.02%
FTSE: 5948.16 +1.47%
S&P 500: 3549.27 +0.64%
DJIA: 28880.49 +0.82%
US 10-YR: 0.657% -0.014
Bund 10-YR: -0.469% -0.053
UK 10-YR: 0.236% -0.06
JPN 10-YR: 0.041% +0.001
Oil: 42.48 -0.65%
Gold: 1948.60 -1.53%
Bitcoin: 11328.01 -5.00%
Ethereum: 437.20 -9.71%

Fresh Market Headlines & Economic Data:

Private payrolls grow by 428,000 but miss expectations, ADP report says

U.S. Mortgage demand from homebuyers is now 28% higher than last year

Oil rises towards $46 on U.S. inventory drop, economy hopes

Fed’s Barkin says U.S. economy will need sustained support

U.S. factory orders climb 6.4% in July in third straight increase

Pelosi says Democrats, White House have ‘serious differences’ over coronavirus aid after call with Mnuchin

Labour productivity of Canadian businesses rose strongly (+9.8%) in the second quarter, while hours worked fell at a much faster pace than business output.

German Retail turnover in July 2020: -0.9% m/m in real terms

Spain’s unemployment rises amid new COVID outbreaks, tourist restrictions

Industrial producer prices up by 0.6% in euro area; Up by 0.4% in EU

Barnier says no change following meeting with Britain’s Brexit negotiator

UK/Japan trade deal good for consumers, companies, Johnson tells Abe

U.K. house prices surge to all-time high in August

UK economy might take years to recover from COVID hit-BoE’s Vlieghe

Upcoming Potential Catalysts on the Economic Calendar

Fed Mester speech at 4:00 pm GMT
Fed Kashkari speech at 6:00 pm GMT
Fed Beige Book at 6:00 pm GMT
Australia Construction Index at 10:30 pm GMT
Australia Services PMI at 11:00 pm GMT
Japan Services PMI at 12:30 am GMT (Sept. 3)
Australia Trade Balance at 1:30 am GMT (Sept. 3)
China Services PMI at 1:45 am GMT (Sept. 3)

What to Watch: AUD/USD

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

On the one-hour chart above of AUD/USD, we can see the bulls making nice gains over the past week, but after today’s weak Australia GDP and yesterday’s positive U.S. business sentiment updates, traders are taking profits to send the pair back a bit.

The pair is now retesting the Fibonacci retracement area of the latest swing higher, and with stochastic signaling potentially oversold conditions short-term, the question now for the next session or two is whether or not AUD/USD bulls will jump back in?

Well, risk sentiment seems to be leaning more negative than positive at the moment with commodities and bond yields stepping back, which could be favorable for AUD/USD bears.

And looking forward, we’ve got speeches from Federal Reserve members and mid-tier Australian data to potentially bring some volatility to the pair.

If we see positive economic surprises from Australia and dovish commentary from the upcoming Fed speeches, then the Fibonacci retracement area may draw in buyers, especially given the strong move lower today of over the daily ATR range (around 65 – 70 pips).

The bears probably have been exhausted unless we get some sort of surprise geopolitical, health-related news event.

For the bears on AUD/USD, as mentioned above, the move today may be exhausted, so it’s probably a good idea to wait for a pullback higher before considering a short-term short play.

Or wait for the actually Aussie data points to see if it’ll give the bears some legs. If so, bears may eye the 0.7350 -0.7400 area as a potential resistance area, so watch out for bearish reversal patterns there before hopping in.