Monday, July 22, 2024
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Chart Art: AUD/USD Ascending Triangle Pattern

by xyonent
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240702 Audusd 780x304.png

Check out this classic chart pattern on the 4-hour frame for AUD/USD.

Is the pair gearing up for a breakout soon, or will we see further consolidation?

The nearby inflection points I’m keeping an eye on are:

AUD/USD 4 hour exchange Chart by TradingView

The AUD pair formed higher lows and found resistance at the key psychological marker of .6700, forming an ascending triangle pattern that has held since mid-May.

The price appears to be attempting a bullish breakout that could prompt a rally as high as the formation spanning nearly 150 pips.

But can they keep up the movement?

Remember that market price directional bias and volatility conditions are usually driven by fundamentals. If you haven’t already, check out our economic calendar to stay on top of the daily fundamental news regarding the AUD and USD.

Dollar traders are nervously waiting for the US Non-Farm Payrolls report as it could have a strong impact on Fed policy. FOMC minutes revealed that policymakers are increasingly concerned about weakness in the labor market, so a weaker than expected NFP could reignite calls for further easing.

This could see a bullish breakout for AUD/USD propel the pair to its next upside objective at R2 (.6730) followed by R3 (.6770), especially as the pair has already traded above the moving averages, confirming the upward momentum.

Conversely, if the dollar regains strength, AUD/USD could again fall to the bottom of the triangle at S1 (.6630) or even a bearish breakdown to the next downside target at S2 (.6590) and then S3 (.6560).

Are you planning on trading the US NFP release on Friday? Which direction do you think this pair will move?

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