AUDUSD Threatens Rising Wedge Formation As Bulls Gain Strength

FXOpen

The Australian Dollar (AUD) extended upside movement against the US Dollar (USD) on Monday, rallying the price of AUDUSD to more than 0.7170 after leaving a hammer on daily chart despite better than expected inflation news from the United States. The technical bias remains bullish because of a Higher Low in the recent downside move.

Technical Analysis

As of this writing, the pair is being traded near 0.7166. A support may be seen around 0.7086, the channel support on daily timeframe ahead of 0.7068, the swing low of the hammer candle which was emerged on Friday. A break and daily closing below the 0.7068 support area could incite renewed selling pressure, validating a dip towards the 0.7000 support area.

2

On the upside, the pair is likely to face a hurdle near 0.7194-0.7200 which is the confluence of psychological number as well as channel resistance as demonstrated in our daily chart ahead of 0.7242, the swing high of the last major upside rally.

US Inflation News

Rising rents and healthcare costs lifted underlying U.S. consumer price inflation in January by the most in nearly 4-1/2 years, providing support for the view that the Federal Reserve could gradually raise interest rates this year as forecast. The Labor Department said on Friday its Consumer Price Index, excluding the volatile food and energy components, increased 0.3 percent last month, the biggest gain since August 2011, following a 0.2 percent rise in December. The core CPI was up 2.1 percent in December from the year earlier. The Fed has a 2.0 percent inflation target and monitors a price measure that is running well below the core CPI.

Trade Idea

Considering the overall technical and fundamental outlook, buying the pair near current levels with a stop placed at the swing low of the daily hammer candle could be a good strategy in short term.

Trade global forex with the Innovative Broker of 2022*. Choose from 50+ forex markets 24/5. Open your FXOpen account now or learn more about trading forex with FXOpen.

* FXOpen International, Innovative Broker of 2022, according to the IAFT

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Forex Analysis

Market Analysis: US Dollar On the Rise Despite Weak PMI Data Market Analysis: GBP/USD Nosedives While USD/CAD Aims Higher EUR/USD Analysis: Key Support Zone Resists Selling Pressure USD/JPY Analysis: Rate Reaches Maximum of the Year Market Analysis: EUR/USD, GBP/USD, and USD/JPY

Latest articles

Forex Analysis

Market Analysis: US Dollar On the Rise Despite Weak PMI Data

EUR/USDThe euro fell against the US dollar on Friday as economic data showed a contraction in economic activity, which could prompt European Central Bank hawks to soften their policy stance. Preliminary data indicates a contraction in economic activity in

Financial Market News

Economic calendar: NASDAQ 100 May Keep Falling, High Volatility in Oil Markets, Potential Appreciation of the US Dollar

The US, Japan and the UK may have kept interest rates on hold last week, but with the Federal Reserve indicating that rates will stay higher for longer, there is turmoil in the equity markets. The NASDAQ 100 fell 500

Financial Market News
Indices

Financial Markets Waking Up after a Turbulent Week: Important News

The main event of last week was information from the Fed. Jerome Powell once again demonstrated his determination to maintain a tough political stance, which caused: → increase in bond yields. Yields on 10-year securities reached their highest since 2009; → the

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.