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!
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Fresh Market Headlines & Economic Data:
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
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?
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.