On lower than expected Australian and Chinese data AUDUSD Drops Within Upward Channel on Friday. What is next for the pair as we start the trading week? Read on for a 360
AUDUSD Drops Within Upward Channel - Technical Analysis
The US dollar faced massive volatility on Friday and the AUD/USD pair dropped sharply on way lower than expected Australian Home loans and Chinese CPI which came in red as well.
AUDUSD Drops Within Upward Channel - Technical Analysis
As AUD/USD drops within upward channel, it is still supported by and upward moving Ichimoku cloud. The main pivot level falls in the middle of the Ichimoku cloud at 23% Fibonacci level at 0.7450. Upper resistance level is set at 38% Fibonacci at 0.78.
This means that even a break below a channel wouldn't be strong enough to change our long-term outlook to bearish, and even may be a good time to go bullish on AUD/USD at the lower pivot.
Trading Strategy
Bullish Scenario
Look for a bullish reversal signal at the lower pivot or if the pair fails to break the Ichimoku cloud. Target 0.78 and 0.8150 in extension depending on your risk tolerance.
The long term bullish resistance level is set at 0.8450.
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