AUD/USD is on the move to the upside, heading for an area that’s held strongly as resistance for over a month. Is this another opportunity for short-term bears to grab a few pips in a short-term swing play?
Short-term Range Play on AUD/USD?
We’ve got a simple technical setup in the works on AUD/USD, which has been in a sleepy side ways pattern for over a month now. The bears have been able to hold the 0.7800 as resistance, while the bulls have bought up the 0.7700 handle like clockwork.
And it didn’t help that the latest monetary policy statement from the Reserve Bank of Australia didn’t give traders a reason to go big one way or another as they made no changes, despite signs of strong economic output and the risks of rising house prices to new records. Concerns of another coronavirus breakout and doubts that the high inflation rates are sustainable seems to be the pushback against tightening policy for now.
But today’s statement was enough to push the Australian dollar higher against the rest the major currencies, developing what could be another short opportunity for the bears at the top of the range.
And we’ve got another potential catalyst from Australia coming soon in the form of the latest monthly read on GDP. Expectations are for a slower growth rate in Q1 2021 than the previous quarter, and if that scenario plays out, that could limit the current bullish sentiment we’re seeing on the Aussie at the moment.
We’ll be watching for that weaker-than-previous GDP read, and AUD/USD already testing the top of the range above, we’ll be on the look out or bearish reversal patterns around 0.7800 for a possible short swing play.
What do you guys think? Will Australian GDP disappoint? If so, is that enough to cool the bullish sentiment on the Aussie?
Let me know in the comments below, and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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