It’s shaping up to be a risk-friendly kind of day, which is why I’m looking at AUD/USD possibly breaking its short-term downtrend.
What do you think of AUD’s 1-hour chart?
Before moving on, ICYMI, I’ve listed the potential economic catalysts that you need to watch out for this week. Check them out before you place your first trades today!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
IMF chief Georgieva sees ‘exceptionally uncertain’ global outlook, deteriorating debt situation
NZ services PMI picks up from 55.3 to 55.4 in June - BusinessNZ
NZ inflation hits 3-decade high at 7.3% in Q2 2022, raising bets on sharper rate hikes
Oil turns higher as supply concerns linger
USD eases as some traders dial back 100bps Fed rate hike bets
Italy’s bond yields rise sharply as Draghi government on brink
European shares join global rally on boost from cyclicals
Upcoming Potential Catalysts on the Forex Economic Calendar:
Canada’s housing starts at 12:15 pm GMT
U.S. NAHB housing market index at 2:00 pm GMT
RBA’s meeting minutes at 1:30 am GMT (Jul 19)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/USD
AUD/USD 1-hour Forex ChartAUD/USD 1-hour Forex Chart
Risk-taking was the name of the game during the Asian session thanks to some traders rethinking their 100-bps rate hike bets for the Fed.
It also helped that People’s Bank of China (PBoC) Governor Yi Gang promised support for the economy over the weekend.
And then there’s the three-decade high inflation release from New Zealand, which boosted NZD and AUD because traders priced in more tightening from RBNZ and RBA.
Speaking of the Reserve Bank of Australia (RBA), we’ll see its latest meeting minutes during the Asian session. If the central bank displays enough optimism to allow for more tightening, then AUD could extend its upswing against its counterparts.
AUD/USD could gain momentum above .6850, which is already above a descending channel that was solid from mid-June to late last week.
I’ll be watching the 100 and 200 SMAs for clues on the strength of the “reversal.”
If AUD/USD breaks above last week’s high and breaches .6900, then it could find enough support to retest .7000.
But if the SMAs turn lower again, or if AUD/USD finds resistance at .6850, then AUD could dip back to the broken channel resistance.
