Promising Setup on the AUDUSDDonald Trump’s tweet ignite the markets again. This time, POTUS was optimistic about the future deal with China, which on some markets, caused and euphoric buying frenzy.
There is an instrument, which is strongly supported by the positive comments from Trade Wars, most recent comments from the local central bank and own technical situation. This instrument is the AUDUSD.
First of all, AUD is affected by the condition in the Chinese Economy. Big Dragon doing well is supporting the Aussie, simple is that. Second of all, we just got a rate decision and statement from the RBA. Although comments were not so hawkish “Prepared to ease monetary policy further if needed, reasonable to expect an extended period of low rates”, traders decided to eventually buy the AUD. That leads us to the technical situation, where we do have a beautiful inverse head and shoulders pattern, which I mentioned in one of our previous videos. The price broke the neckline and then defended that as a support, which is giving us a green light to go long. What is more, we are currently breaking the major down trendline and price closing a day above the red line, should be a bullish game changer.
Similar setup can be found on the USDJPY. Yen is weakening across the globe. Here, the price also defended the neckline and went higher. For the legitimate buy signal, we need to break the resistance on the 109.
Last one is the USDMXN, Dollar to Peso, where I showed you the symmetric triangle pattern. We are still inside but the buyers are not using the lower line of this formation as a trigger to go higher. This may indicate the willingness to break this support, which should bring us a sell signal. As for now, we wait but once the price will close below the green line, technical analysis will ring the bell to go short.
This article is written by Tomasz Wisniewski, Director of Research and Education at Axiory