The AUD/USD is trading in the green right now tries to recover after the last day’s drop. Has managed to erase the yesterday’s losses, but now is facing a tough resistance level. Is pressuring a major potential resistance, so remains to see what will happen in the upcoming hours because a rejection after the US data release will confirm another leg lower.
Right now is premature to talk about another leg lower because the rate is still located in the green territory, only a USDX’s rally will force it to turn to the downside again.
The Aussie was helped also by the Australian Westpac Consumer Sentiment, which increased by 2.5% in September, versus a 1.2% drop in the previous reporting period.
We may have some volatility later, after the US will publish the economic data. The PPI is expected to increase by 0.3% in August versus a 0.1% drop in July, while the Core PPI may increase by 0.2% after the 0.1% drop in the previous reporting period. The Federal Budget Balance will be released as well tonight and is expected to drop from -42.9B to -118.6B.
Price has increased significantly after the retest of the upper median line (UML) of the major ascending pitchfork and after the failure to close on this level. Now is pressuring the upper median line (UML) of the black descending pitchfork. I’ve drawn the major descending pitchfork hoping that I’ll catch a potential downside movement in the upcoming weeks and months.
A rejection from the UML and a valid breakdown below the upper median line (UML) of the dark blue ascending pitchfork will confirm an important drop. Technically another is somehow expected after the failure to close above the sliding line (SL) and after the failure to close near this level.
Technically it could drop, but unfortunately the fundamental factors will take the lead later, so you should be careful because another disappointment from the US will send the rate towards fresh new highs.