The AUD/USD currency pair rebounded on Friday to reject a restest of the current yearly lows. The pair had dropped to touch the 0.6990 level over the last two days before conjuring a late rally on Friday to close at around the 0.7000 level.
The pair has been on a downward trend since late last month and this seems set to continue through next week. The current rebound was pegged around 0.7000 where the pair faces strong trendline resistance.
AUD/USD Fundamentals Overview
The AUD/USD currency pair’s performance has recently been driven by the steady US economy, which is why the pair has maintained a downward movement since mid-April.
On Friday the US non-farm Payrolls beat expectations yet again with more than 360k new jobs versus 183k projected. But the wage growth missed estimates, which is why the Aussie managed to conjure some recovery.
Looking forward, traders will keep a close eye on the Federal Reserve’s Harker Speech. The Aussie will look for Strength on RBA’s interest rate decision on the following day with a flurry of economic data (Imports, Exports and Trade Balance) also scheduled.
AUD/USD Technical Analysis (the 240-min Chart)
The AUD/USD currency pair appears to be trading within a converging wedge that could lead in the formation of a triangle pattern. This could result in a major breakout most likely downwards given the current momentum.
As such, the bulls will look to pounce on opportunities around 0.7040 level in the short-term. On the other hand, the bears will target the expected pullback by targeting profits at around 0.7000 or down below at around 0.6990.
AUD/USD Technical Analysis (the Daily Chart)
In the daily chart, the pair appears to be on course to complete the XABCD pattern. This confirms the current bearish bias given the pair’s current position in the pattern formation.
The bulls will have limited opportunities to aim at. The most realistic targets are short-term rebounds. But the bears will be buoyed by the current trend and will look to pounce on every pullback.
In summary, the AUD/USD currency pair maintains a bearish bias in the short-term and the intermediate time frames. The bulls will look to pounce on rebounds before a major breakout occurs.