Welcome to the first trading day of 2021! And with the risk vibes slightly leaning negative at the moment, we’re spotting a potential short-term uptrend pullback setup on AUD/USD.
|Equity Markets||Bond Yields||Commodities & Crypto|
DAX: 13751.35 +0.24%
FTSE: 6589.24 +1.99%
S&P 500: 3716.87 -1.04%
NASDAQ: 12767.68 -0.94%
US 10-YR: 0.922% +0.01
Bund 10-YR: -0.603% -0.028
UK 10-YR: 0.76% -0.02
JPN 10-YR: +0.031% +0.008
Oil: 47.63 -1.83%
Gold: 1,943.60 +2.55%
Bitcoin: 31,858.75 -2.87%
Ethereum: 1,039.60 +7.83%
Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
Fed Mester speech at 5:15 pm GMT
ECB Lane speech at 8:45 pm GMT
Fed Mester speech at 11:00 pm GMT
Japan Monetary supply at 11:50 pm GMT
U.S Vehicle sales at 12:00 am GMT (Jan. 5)
Australia Job Ads at 12:30 am GMT (Jan. 5)
What to Watch: AUD/USD
On the one hour chart above of AUD/USD, we can see the pair taking a step back from an longer-term uptrend after a double top formation over the last couple of sessions around the 0.7740 area.
This pull back doesn’t seem to be off of any major catalysts, so it may be more technical in nature. If that’s the case, the dip lower may be seen as a buying opportunity for traders if no new catalysts come out to re-shape longer-term sentiment.
If that scenario plays out and the pair dips back to the rising ‘lows’ pattern and the Fibonacci retracement area, look out for bullish reversal patterns around the 68% – 50% Fib retracement area.
And if stochastic is fully indicating oversold conditions, that may be more convincing for risk-on traders to get a bit more bullish.
Of course, if we do see downside momentum pick up, with or without a catalyst as this move could be on positioning/technicals, then watch out for a break below the rising ‘lows’ pattern before considering a short position.
This setup especially makes sense if we do see negative catalysts (e.g., rising geopolitical tensions between U.S. and Iran, more updates of slow vaccine rollouts, continued extension of lockdown protocols).