AUD/USD Falling Wedge? January 09, 2017

The price has increased today and has managed to erase the Friday’s losses, has managed also to climb above the 0.7355 last week high and now looks determined to kiss new higs as the US dollar index is trading in the red again after the Friday’s impressive rally. The is now challenging and important dynamic resistance, remains to see if we’ll have a valid or a false breakout, the price has climbed above the dynamic resistance, but has slipped lower in the last hours. The USD has received a helping hand from the US economic data.
The USD has posted humble gains after the United States Consumer Credit report was published, the indicator has increased from 16.2B to 24.5B in November, beating the 18.3B estimate, has reached the highest level of the last 3-months and has saved the greenback, while the Labor Market Conditions Index has dropped by 0.3%in December, the indicator has fallen again in the negative territory after two increasing months. The price was driven higher by the technical factors, we had a poor economic calendar today, but tomorrow we may have some volatility as the Australia and China are to release some high impact data in the early morning.
The Aussie has also increased today because the Australian Building Approvals rose by 7.0%, beating the 4.6% estimate, the indicator has managed to increase again after the 11.8% drop in the previous reading period, while the AIG Construction Index has increased from 46.6 points to 47.0 points. Unfortunately the ANZ Job Advertisements decreased by 1.9%, but remains to see how the price will react in the morning as the Australian will release the Retail Sales, which could increase by 0.4%, while the Chinese CPI may increase by 2.2% in December, while the PPI is forecasted to increase by 4.6%.

AUDUSDd

You can see that the price is pressuring the Faling Wedge’s resistance, has increased above this level, but till now we have only a false breakout because the rate has slipped lower in the last hours. The rate has failed to hit the 0.7382 static resistance, so we have to wait for a valid breakout, we still have to wait for a confirmation that the price will resume the upside movement. The current rebound was expected after the failure to break below the major median line (ML) of the red descending pitchfork, actually the price has failed to close right on the median line (ML), signalling that is too oversold to stay lower. The behavior has changed on the short term when the price has started to make higher lows, but I want to remind you that the sentiment remains bearish despite the current rebound.

AUDUSDh

You can see that the price has broken the Falling Wedge resistance, but now has come back to challenge this level, a failure to stay above the downtrend line will invalidate the breakout and could attract more sellers which will force the price to decrease a little these days.