The AUD/USD currency pair’s recent rebound capped at around 0.7110 level as US-China trade talks draw nearer. The pair has demonstrated a potential case of short-term consolidation as the spotlight is set on the outcome of the US and Chinese trade tariffs talks. The pair continues to enjoy a strong support base with a descending resistance.
AUD/USD Fundamentals Overview
From a fundamental perspective, traders will be keeping an eye on the US Initial and Continuous Jobless claims data expected at 12:30 GMT today.
Analysts are expecting a slight increment from the previous figure of 211k to a figure of 21k in Initial Jobless claims while Continuing Jobless claims are expected at around 1.75M, relatively flat from the previous figure.
The delay in the US-China trade talks will continue to weigh on the performance of the pair, as the Aussie relies a lot on the performance of the Chinese economy.
AUD/USD Technical Analysis (the 240-min Chart)
Technically, the AUD/USD currency pair looks to be trading within a bearish wedge, which could lead to the formation of a bearish triangle breakout pattern. Looking at the Moving Average lines, all three, the 50-period, 100-period, and 200-period MAs in the 240-min chart appear to be converging around the 0.7100 level, which indicates a potential case of short-term consolidation.
As such, the bulls will target opportunities at around 0.7120/30 while the bears will hope the current pullback continues towards the 0.7085 level.
AUD/USD Technical Analysis (the Daily Chart)
In the daily chart, the triangle formation and the consolidation of the pair near the end are clearer. The AUD/USD currency pair appears to be heading towards a bearish breakout and this could become a reality very soon with the greenback expected to strengthen even more in the coming days with the release of non-farm payrolls data.
As such, the bulls will have a couple of opportunities to target in the chart-term and the intermediate time frames as will the bears as demonstrated on the daily chart, at around: 0.7130/90 (bulls) and 0.7065/10 (bears).
In summary, the AUD/USD currency pair’s short-term consolidation appears to be almost complete and given the fact it is inside a triangle formation, a bearish breakout can be expected soon.