Good evening team,
We are taking a look at the AUDUSD for a possible buy opportunity. The USD index has set up a potential head and shoulders formation. Tonight the USD will be in focus as the US reports their latest CPI data. Inflation has been a key theme that we have seen across the media over the past two weeks, and has been one of the main drivers of the USD strength. However, the FED has maintained the view that inflation is not anywhere near their long term target. Any miss to the downside could give USD bears some momentum and cool inflation fears in the market. Additionally, global stocks enjoyed a fairly positive day yesterday after coming under some pressure last week. If we see a bounce and a continuation higher, the market will bring the AUD with it.
AUDUSD – 1 Hour Charts
A couple of technical pattens to be aware of, the breakout of the falling wedge formation and an inverted head and shoulders structure. We are now looking to buy the pair back towards the 0.7800-0.7840 resistance zone.
Trade Setup: BUY market execution, current price 0.7700, stop loss 0.7620 and take profit 0.7840.
Stop loss: 80 pips
Take profit: 140 pips