AUDUSD Inverse Head & Shoulders

AUDUSD Inverse Head & Shoulders

AUDUSD Inverse Head & Shoulders

This week’s surprisingly strong Australian employment numbers failed to have a lasting impact on the Australian dollar but a healthy employment report reinforces the RBA’s optimism and this will be important going into next week’s RBA minutes and speech from Board member DeBelle. We believe that the central bank will maintain its positive tone, helping currency traders overlook the drop in commodity prices. The U.S. dollar has also been weakening pre-FOMC and if the Fed fails to deliver, this could revive the rally in AUD/USD.

Technically there is an inverse head & shoulders pattern forming in AUD/USD as long as the pair holds above 0.7050, which is support. Resistance is at the neckline near 0.7385. This is a wide range that we expect the currency pair to trade in the days ahead.

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