Over the past week, we observed two bullish formations which took place on a daily chart. Besides forming 2 bullish formations, we observed bearish signals as well but the first bearish signal was broken to the upside hence we invalidate that. AUDUSD should have the potential to push up to 0.788, failing to move higher we will look to support at 0.764 and 0.757.
We are bullish on AUDUSD, currently in the money with 50pips. Our bias will be invalidated when price breaches below 0.76156.
Senate has failed to pass Trump's Healthcare act to replace Obamacare. This is a major defeat for Trump and we should a delay for Trump to push forward Trump's healthcare act. This news came out to be negative USD, putting pressure on USD which is already beaten down. Due to investors forsaking USD and a quiet US session, we see other currencies such as AUD, CAD and EUR strengthening against USD.
Over the past week, we see US dollar weakening. Fed Yellen did not set a hawkish tone during her address. It was highlighted that inflation figure is a concern, below the targeted inflation rate of Fed, with year on year consumer price index rate dropped to lowest in 8 months. Retail sales also contracted slightly. With that, September rate hike should be likely be put on hold. During this period, we observe that other central banks seem to be hawkish of the economy, an indication of rate hike.
That explains and suggests that demand for US dollar to be negatively impacted while favoring other currencies with which central banks are hawkish. We observe the strengthening of GBP, AUD and CAD.
We were long AUDUSD last Friday after identifying reversal candlestick pattern. Since it was last day of the week, we decided to close off position. For that position, we were up 15pips.
I took a short in AUDUSD at 0.772 with stop loss at 0.7739 and take profit at 0.76. We can observe lower low price movement and price broke support. AUDJPY 4h is possibly moving slightly lower.
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