Readers of this site are no stranger to the AUDUSD, especially in recent weeks. It has quickly become one of the more talked about currency pairs given the late-stage terminal pattern that’s been forming since the January lows at 0.6825.
However, I felt compelled to mention the pair yet again ahead of the upcoming US Q3 GDP report.
While the broader wedge pattern (below) is still intact, the Aussie is now hovering just 20 pips above critical support at 0.7565. Add Friday’s event risk to the mix, and you have a recipe for fireworks or at least the potential.
I also wanted to comment on Wednesday’s bearish rejection. Despite having managed a 65 pips intraday rally spurred on by the latest CPI figure, buyers were in full retreat by the close of the session.
From a technical standpoint, the last 48 hours have played out in textbook fashion. This is because a false break – like the one that occurred on October 19th – often leads to an extended move in the opposite direction.
So far we’ve seen the move in the opposite direction but whether or not it becomes an extended move is still unclear.
We’ll see where tomorrow’s US advance GDP comes in at 8:30 am EST, but right now anything that’s above estimates has the potential to trigger a massive break in the AUDUSD. And if that doesn’t do it there is always Monday’s RBA rate decision at 11:30 pm EST.
On the flip side, a move higher from current levels would likely encounter a flood of offers near the 0.7650 handle.
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