AUDUSD rally running out of steam, selling preferred

The Australian dollar traded higher recently against the US dollar to trade close to the 0.9400 level. However, the pair found sellers around a bearish trend line, as highlighted in the 4 hour chart shown below. Currently, the pair is heading lower, and might continue to trade lower. So, any correction or retracement might present us a selling opportunity.

Looking at the hourly chart of AUDUSD, the pair has a resistance area at around the 0.9355-65 levels, as can be seen below. If the pair trades higher from the current levels, moves closer to the mentioned resistance levels and forms a bearish divergence, then we can jump into a sell trade. Remember, the pair needs to stay below the 0.9380-0.9400 levels for this trade setup to be valid.

Initial target should be around the 0.9300 level, and final target could be around the 0.9250 level. Stop should be placed above the 0.9390 level.

Reviewing yesterday’s events and trades
Yesterday, there was no major economic release scheduled except for the Chinese retail sales data and US federal budget balance. The Chinese retail sales data came better than expected with a gain of 3%, beating the expectations of 2.3%. However, the data failed to boost the risk sentiment in the short term. Later during the NY session, the US federal budget balance data was published, which missed the expectations. Overall, the market traded in a range, as the EURUSD and GPBUSD pairs consolidated during most of the day.

Fundamental Outlook for the day
Today, the US retail sales data will be published during the New York session. The expectation is not that great, so any better than expected outcome might push the US dollar higher in the short term. The US business inventories data will also be published, which can also move the dollar. Moreover, during the next Asian session, the New Zealand’s retail sales data will be published along with a speech from the RBNZ Governor Wheeler. This can act as a string catalyst for the New Zealand dollar during the Asian session.

This analysis is taken from today’s Daily Market Forecast, which also includes trade opportunities on: GBPUSD, EURGBP, USDCAD, USDJPY and EURCAD.
Get it HERE: Vladimir’s Markets Forecast

Trade safe friends. Happy trading!

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