AUD/USD has been making higher lows and finding resistance at the .9460 area, creating a forex trade signal on the ascending triangle on its 4-hour time frame. The pair just found resistance at the top of the triangle and is on its way to test the bottom, which might continue to hold as support.
Stochastic is already in the oversold area, indicating that selling pressure is already exhausted. Price might bounce off the .9375 levels before resuming its climb back to the top of the triangle later on.
If you plan on going long on the forex trade signal at the triangle support, make sure you stet a tight stop below the .9350 area to exit the trade if a breakdown takes place. Aiming for the top of the triangle could yield a 2:1 return on risk for a short-term trade.
AUDUSD Forex Trade Signal
Recall that sentiment has shifted to a more bullish one on the Australian dollar after the Australian economy reported a strong CPI reading. The quarterly figure marked a 0.8% gain in price levels, enough to bring annual inflation to the top of the central bank’s 2-3% target range. This eased fears that the RBA might cut interest rates later on.
Strong data from the US fueled dollar demand on Friday though, along with profit-taking on most trades before the end of the week. After all, there are plenty of geopolitical risks worldwide and this weighs on market sentiment.
Despite that, AUD/USD might bounce off triangle support pretty soon if risk appetite returns to the markets. Also up for release later on this week are the official Chinese manufacturing PMI data and the HSBC PMI, which might both print improvements and spell better prospects for Australia’s export sector.
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