AUDUSD might be in for another major forex market retracement, as price could make its way up to the falling trend line connecting the latest highs of price action. The pair previously broke through support around the .8700-.8800 major psychological mark and dipped to the .8500 handle.
Since then, the pair has pulled up to the 38.2% Fib, which is in line with the area of interest. A higher forex market retracement might last until the 61.8% Fibonacci retracement level, which is closer to the trend line and the .8650 minor psychological mark.
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Stochastic is already moving down from the overbought area, which indicates a pickup in selling pressure. This could lead to a test of the previous lows at .8500 or perhaps the creation of new ones until the .8300 area.
Earlier today, Australia reported a stronger than expected private capital expenditure reading, which showed a 0.2% gain instead of the projected 1.7% decline for the third quarter. There are no reports up from the US economy today as traders are on a Thanksgiving holiday.
Bear in mind though that the US posted weak reports in the forex market yesterday, leading to dollar weakness. Only the headline durable goods orders reading posted strong results, while the core durable goods orders, personal spending and income, Chicago PMI, and revised consumer sentiment data came in below expectations.
This was enough for some forex market traders to doubt that the US economy could sustain its pace of growth in the coming months. Even though the preliminary GDP reading showed an upside revision to 3.9% and allowed the economy to chalk up its highest six-month growth rate in over a decade, a potential economic downturn could still douse rate hike expectations for next year and lead to a dollar decline.
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