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With more Fed speak ahead and potential economic catalysts from Australia and China, we’re checking out the uptrend / consolidation in AUD/USD for fresh short-term setups.

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

Equity Markets Bond Yields Commodities & Crypto
DAX: 13973.24 +0.35%
FTSE: 6749.81 -0.06%
S&P 500: 3806.92 +0.15%
NASDAQ: 13126.46 +0.41%
US 10-YR: 1.097% -0.041
Bund 10-YR: -0.524% -0.055
UK 10-YR: 0.31% -0.045
JPN 10-YR: 0.031% +0.001
Oil: 53.39 +0.34%
Gold: 1,860.00 +0.85%
Bitcoin: 34,713.00 +4.99%
Ethereum: 1,063.54 +4.53%

Fresh Market Headlines & Economic Data:

House to Vote on Impeachment as Republicans Break From Trump

Stocks are flat as Wall Street struggles for a direction

Mortgage applications to purchase a home rose 8% for the week and were 10% higher than one year ago.

U.S. consumer price index increased 0.4% m/m in December after gaining 0.2% in November.

Fed’s Bullard says all signs point to inflation rising

ECB’s Lagarde pushes back on gloomy forecasts, sticks to recovery outlook

German Wholesale prices in 2020: -2.0% on 2019

Industrial production up by 2.5% in euro area and 2.3% in EUD Down by 0.6% and 0.4% compared with November 2019

In November 2020 the seasonally adjusted industrial production index decreased by 1.4% m/m.

NIreland stores see empty shelves as Brexit trade rules bite

Job vacancies surge to pre-COVID levels, as Australian share market loses momentum

Upcoming Potential Catalysts on the Economic Calendar

Fed Brainard speech at 6:00 pm GMT
Fed Harker speech 7:00 pm GMT
Fed Beige Book at 7:00 pm GMT
Fed Clairda speech at 8:00 pm GMT
Japan PPI at 11:50 pm GMT
Australia Building Permits at 12:30 am GMT (Jan. 14)
China Trade Balance at 3:00 GMT (Jan. 14)

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 pair consolidating into a symmetrical triangle pattern, centering around the 0.7750 minor psychological handle.

It looks like there really isn’t any strong bias in the overall markets one way or another as traders don’t seem to be sure what to do with rising bond yields, geopolitical issues and the continued explosion in COVID cases/deaths/hospitalizations.

But we may see a pop in volatility for both the Greenback and the Aussie on the session with more speeches from Federal Reserve officials later today, and potentially on economic updates from Australia and China later in the upcoming Asia trading session.

With the overall uptrend higher in AUD/USD, the top setup to watch out for is a retest of the rising ‘lows’ pattern, and if we see bullish patterns develop on top of better-than-expected economic updates, that could draw in short-term buyers, or even swing buyers.

Another setup to watch out for is if we see rhetoric from Fed speakers on the potential to reduce stimulus measures as rising bond yields and inflation start to become a concern. This could spark further USD strength, and if that scenario plays out, a break below the rising ‘lows’ pattern could draw in more sellers for a short-term momentum move to the downside.