I’m taking a look at one other descending triangle on one other greenback pair right now!
This time I’ve acquired this AUD/USD setup forward of the U.S. PPI and UoM client sentiment knowledge.
Greenback merchants are nonetheless taking part in it cool forward of those top-tier stories that might doubtless affect Fed tightening plans, so I’m relying on larger strikes to occur as soon as the numbers are out.
For now, AUD/USD is caught inside a consolidation sample, forming decrease highs and discovering assist across the .6520 space.
Value is bouncing off assist whereas Stochastic is transferring up, suggesting that one other check of the triangle high is likely to be so as. This strains up with the .6550 minor psychological mark and 100 SMA dynamic resistance, which could preserve good points in verify.
In spite of everything, the 100 SMA is beneath the 200 SMA to counsel that bearish vibes are current, so resistance is extra more likely to maintain than to interrupt.
Nonetheless, downbeat U.S. inflation stories is likely to be sufficient to sprint hopes of a September Fed hike, which may then translate to sharp losses for the greenback and a bullish AUD/USD breakout.
If that occurs, the pair may climb by the identical peak because the triangle sample or a minimum of check the subsequent upside barrier on the pivot level (.6610) close to the .6600 main psychological mark.
However, sturdy U.S. CPI, PPI, and UoM client sentiment figures may revive FOMC tightening bets even previous the September assembly, thereby spurring a powerful greenback rally.
A break beneath the triangle assist could lead on a dip to S1 (.6470) then a drop that’s roughly the identical peak because the formation or 100 pips.
Unsure which course this one may go? A straddle technique may work out, so long as you’re taking the common AUD/USD day by day volatility under consideration when setting entries and exits!
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