Article source: forexminute.com
AUDUSD has formed higher lows and lower highs on its 1-hour forex chart, creating a symmetrical triangle chart pattern. The pair is nearing the peak of the triangle, which means that a breakout is bound to take place soon.
Stochastic is hinting at a potential downward move since the indicator is already indicating overbought conditions. A candle close below the triangle support at .7700 could confirm that further losses are likely. On the other hand, a move past the triangle resistance at .7750 could be a sign that the pair is ready to keep climbing.
The short-term moving average is moving above the longer-term 200 SMA, suggesting that a potential rally is possible. If that happens, the pair could climb by around 200 pips, which is roughly the height of the chart formation. Similarly, a downside break could lead to a 200-pip selloff for AUDUSD.
AUDUSD Fundamental Factors
In the previous US trading session, the US economy printed stronger than expected retail sales figures for May, renewing demand for the dollar. After all, this confirms that the Fed might stay on track to tightening monetary policy by hiking interest rates in September. Core retail sales increased by 1.0%, higher than the projected 0.7% uptick, while headline retail sales showed a stronger than expected 1.2% rise.
In Australia, the May jobs report showed a higher than expected gain in hiring of 42K but this was clouded in doubt due to the ongoing personnel and budget cuts in the Australian Bureau of Statistics. The jobless rate fell from 6.1% to 6.0% while the participation rate held steady at 64.8%.
Up ahead, only the producer prices reports are up for release from the US economy and this could provide clues on overall inflation trends. Headline PPI could show a 0.4% increase while core PPI is expected to post a mere 0.1% uptick, although stronger than expected data could spur more dollar gains and an AUDUSD breakdown.
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