The AUD/USD managed to rebound after the last short correction momentum, the Aussie buyers have taken the lead again and have dragged the price higher even if the US dollar index has jumped higher this week. The pair has jumped above the previous swing high from 0.7722 and now looks determined to take out a strong dynamic resistance. The dollar could drop again as the USXD looks exhausted to continue the short term rebound, the index has hit a major dynamic resistance, but wasn’t able to close right on this obstacle, has ended the yesterday’s trading session much below this major obstacle.
The Australian dollar edges higher on mixed Chinese economic data, the AUD/USD looks ready to climb toward fresh new highs as the China’s Industrial Production has increased by 6.8% in March, much higher compared to the 5.4% growth from February and unexpectedly higher compared to the 5.9% estimate. The Chinese Gross Domestic Product rose by 6.7% in the last month, matching expectations, has increased less than the 6.8% from January. Moreover the Retail Sales indicator has increased by 10.5% in March, exceeding the 10.4% forecast, the retail sales continue to increase after a short drop in February. The Fixed Asset Investment rose by 10.7%, higher than the 10.4% prediction, while the New Loans have increased by 727B to 1370K in March.
The price is challenging the sliding parallel line, we have a strong resistance at this level, but most likely will take out this resistance as the price has managed to jump and close above the 61.8% retracement level, is trading much above the upper median line (UML) signalling that the pair remains strongly bullish. The major upside target remains at the long term 50% retracement level, the price could retest the upper median line before will start a strongly bullish momentum, personally I’m expecting to see a consolidation above the 61.8% retracement level because we need a confirmation that the breakout is valid.
A broader rebound was expected on this pair after the breakout above the 38.2% retracement level, the price has escaped from the extended sideways movement between the 38.2% and the 0.0% level. The pair will become strongly bullish if will jump and stabilize above the sliding parallel line, we have another important target at the first warning line (WL1) of the ascending pitchfork, the price could approach this objective as long as stays above the upper median line.
The price has retested the upper median line in the last two days, the support line has hold and has rejected the price, remains to see if will have enough energy to break above the sliding line, this scenario will take shape if the US dollar index will drop deeper in the coming hours. AUD/USD is moving upside inside of an ascending channel, between the 50% Fibonacci line and the sliding line.
I’ve drawn a short term pitchfork on the H4 chart, you can notice that the price looks exhausted on the short because has failed to stabilize above the median line (ml), a short retreat is expected from the confluence area formed at the intersection of the median line (ml) with the daily sliding line, we could have another buying opportunity from the lower median line (lml).