- AUD/USD bears are gathering with volume up high within the recent range.
- A breakout could be imminent and 0.6950/00 is the key.
In the opening article for the week on AUD/USD, AUD/USD Price Analysis: Key support in play with eyes on 0.6900/50 for the opening range, it was stated that on the hourly chart, ''we have 0.6950 to clear before a bullish thesis can be solidified, so it is a case of seeing how the opening range on Monday develops.''
However, while holding above the trendline and said support, there were prospects of a short squeeze to test 0.6950 for Monday and p[prospects of a move into low-hanging fruit below 0.6900 and into the 0.6880s beforehand:
AUD/USD updates
The target areas were done as illustrated above ahead of US CPI volatility on Tuesday:
The market was essentially stuck in a range into the data so picking which side to bias one way or the other was a task of improbable outcomes unless hedging your bets. However, with the dust settling, the price is up high in the consolidative range and there could be a bearish thesis drawn as follows:
We have a possible bearish head and shoulders up high within the range:
A break below 0.6950 opens risk of a test of 0.6900 again and from a daily perspective, this could be the most probable outcome for the days ahead:
There has already been a move to test the neckline of the M-formation neckline and a test of the 61.8% Fibonacci retracement level. We also have a W-formation which is also a bearish feature as follows:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.