The AUD/USD has managed to increase in the fresh start
of this week, but the pair could drop further if the US dollar index will
resume the last week rebound, the Aussie has increased even if the Chinese data
has disappointed today. The currency pair could resume the last week bearish
momentum as the price has found strong resistance on Thursday, the rate is
retesting a dynamic resistance level and then could drop on the in the coming
days, technically the price could drop in the coming period, but the price
could be driven by the fundamental events, the Federal Reserve will announce
the Federal Funds Rate on Wednesday, the rate is expected to remain on hold at
0.50%, I’ve said in other articles that I don’t believe that we’ll see another
increase till September because the US economic data could come worse in the
coming months. The FED is less likely to increase the rate ahead the Brexit
referendum, remains to see what will happen in the UK, and only then we could
think to a rate hike.

The Aussie has ignored the Chinese economic data, the China’s
Industrial Production rose by 6.0% in May, less compared to the 6.1% estimate,
the production growth remains the same like in April, while the Retail Sales
have increased by 10.0% in May even if the traders have expected a 10.1%
growth.  Moreover the Fixed Asset
Investment rose by 9.6%, even if the prediction was 10.5%. The Australian Banks,
but tomorrow we could have some action on the AUD/USD pair as the Australia and
the US are to release some important economic data. 

The price is testing the median line of the descending pitchfork, is
expected to drop further if will stay below this level, is challenging also the
0.7382 static support (resistance turned into support), we’ll have a selling opportunity
if the price will retest the confluence area formed at the intersection of the
minor median line (ml) with the 0.7382 level. The pair could drop along the
median line of the descending pitchfork as the price has failed to stabilize
above line and above the median line of the ascending pitchfork, the next major
downside target is at the lower median line of the descending pitchfork,
actually the price could be attracted by the confluence area formed at the intersection
of the lower median line (lml) of the descending pitchfork with the lower
median line (LML) of the ascending pitchfork. 

You can see on the H4 chart that the price is retesting the median
line of the short descending pitchfork, has failed to close above this obstacle
and could start another leg lower in the coming hours and could approach the
0.7299 horizontal support  where could
find temporary support on the short term. The rate needs to ignore the 0.7358
intraday support if he wants to resume the last week bearish movement.

My advice is to stay away from trading on Wednesday during the FED because
we’ll have high volatility on the major currency pairs.

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