AUD/USD Forex Signal: Falling Wedge And Bearish Pennant Patterns Form

Bearish with a focus on key levels; upcoming US consumer data and Fed decisions may impact. Technical patterns hint at possible declines.


Bearish view

  • Sell the AUD/USD pair and set a take-profit at 0.6500.
  • Add a stop-loss at 0.6580.
  • Timeline: 1-2 days.


Bullish view

  • Set a buy-stop at 0.6550 and a take-profit at 0.6620.
  • Add a stop-loss at 0.6500.

(Click on image to enlarge)

AUD/USD Signal Today - 26/03: Wedge & Pennant Form (Graph)

The AUD/USD recovered slightly as investors bought last Friday’s dip. It rose to a high of 0.6540 on Tuesday, a few points above last week’s low of 0.6510. The focus now shifts to the upcoming US consumer confidence, durable goods, and house price index numbers.


US economic data ahead

The AUD/USD pair rose slightly as traders reacted to last week’s Federal Reserve and RBA decisions. In its decision, the RBA left interest rates unchanged and signalled that it was done raising interest rates.

The Federal Reserve, on the other hand, left rates intact between 5.25% and 5.50%. It also signalled that it will deliver three rate cuts later this year.

However, several Fed officials have warned that the number of cuts will be fewer than that. In a statement, Raphael Bostic of Atlanta Fed, said that the bank could deliver just one rate cut this year.

However, in a statement, Lisa Cook, a Fed governor, noted that risks were moving to a better balance. She believes that the bank has room to cut rates later this year.

The AUD/USD pair will next react to the upcoming US economic data. The Conference Board will publish the latest consumer confidence numbers. Economists expect the data to reveal that confidence rose slightly from 106.7 in February to 106.90 in March.

Consumer confidence is a crucial economic data because of the role that spending plays in the economy. Data shows that consumer spending leads to strong economic growth in the US.

The other data to watch will be the durable goods orders numbers. An improvement of these numbers will be a positive sign for the economy since they have been in a downward trend. The US will also release the latest house price index (HPI) numbers.


AUD/USD technical analysis

The AUD/USD exchange rate drifted upwards slightly as traders started buying the dip. On the 4H chart, the pair has retested the Woodie pivot point and the 50-period Arnaud Legoux Moving Average (ALMA).

The pair has formed a small rising wedge and bearish pennant patterns. These patterns are some of the most bearish signs in the market. Therefore, the outlook for the pair is still bearish, with the next target to watch being at 0.6500, its lowest point this month. The stop-loss of this view is at the first resistance of the Woodie pivot point at 0.6580.

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