Forex Update: AUDUSD setting up for a continuation lower?
Hi, and welcome to Friday’s update. With a stronger USD, focus is on risk currencies today. In particular, we are watching the AUDUSD from the short side as sellers have beaten yesterday’s low, and if we see a break of yesterday’s low, this could signal a new continuation.
Please take a look at the daily chart. You will see that the current pattern is very similar to the previous pattern we saw that produced the last continuation lower. The pattern is an ascending triangle, and in a downtrend, they’re usually seen as continuation patterns once confirmed. All we really require now is a statement bar from sellers confirming the new move, as we saw on the 6th of the 10th.
For us, a lot will come down to USD momentum. Fed comments continue to drive bulls, and while this is in play, we feel that risk currencies will continue to move lower as they have for the year so far. But if AUDUSD sellers fail to break 0.62 for the 2nd time, this could be a sign that buyers are trying to form a base, and momentum could be waning.
Good trading and have a fantastic weekend.
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