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Australia’s quarterly CPI readings just came in below expectations while the Greenback is trying to bounce back against its rivals. Here’s what I’m watching on AUD/USD.

AUD/USD Trade Setup

In my Comdoll Trading Kit this week, I’ve shared with y’all the range setup I was seeing for this pair. However, price seems to be hitting another nearby resistance level right at the top of the symmetrical triangle visible on the daily time frame.

At the same time, stochastic just made it to the overbought region, suggesting that buyers could book profits and let sellers take the upper hand. If so, AUD/USD could make its way back down to the triangle support around the .7250-.7300 area.

AUD/USD Daily Forex Chart
AUD/USD Daily Forex Chart

I’m turning slightly bullish on the Greenback now that President Donald Trump seems to be settling well in the White House. U.S. investors appear to have regained confidence, as a couple of stock indices hit record highs in the latest New York session.

This could turn the spotlight back on the improvements in the U.S. economy and the fact that the Fed is considering more interest rate hikes later on this year.

Meanwhile, recent reports from Australia failed to impress as the Q4 CPI reading printed a 0.5% uptick versus the projected 0.7% increase in price levels. The trimmed mean CPI or the core version of the report indicated a 0.4% rise instead of the estimated 0.5% gain.

Still, the Aussie has the improved outlook for China going for it, so I can’t help but worry that an upside triangle breakout is still possible. And of course, there’s always the element of surprise from Trump himself!

I think I’ll wait for stochastic to head south from the overbought area and reflect more bearish momentum before hopping in. Don’t forget to check out our risk disclosure if you’re trading this one, too!



See also: Q4 2016 Trading Performance Review

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This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.