AUD/USD Price Analysis: Bears back in the game ahead of critical Aus CPI & Fed


  • AUD/USD bears are back in the game and eye a downside daily extension. 
  • Risk events coming to the foreground make for a treacherous playing field. 

As per the prior day's analysis, AUD/USD Price Analysis: Bulls coming up for their last breath? the bears did indeed step in as projected which has forced the price back into the centre of a familiar 4-hour range.  

AUD/USD has been analysed as technically bearish in a series of articles as follows: 

In the most recent of the price action analysis, AUD/USD Price Analysis: Bulls coming up for their last breath? shorts were sweating as the price rallied against the position as follows making for a trapped scenario on the 4-hour chart:

However, in the article, it was explained how to manage such a scenario.

At this juncture, the most prudent action from the bears would be to move their take profit target to entry and get out at best breakeven on a restest of the entry point. In doing so, they live to trade another day.

As a result, short positions would now be covered for a breakeven scenario:

Live market, 4-hour chart

 

At this juncture, the price is sideways and there is nothing to do until, as explained in the prior analysis, ''on a subsequent retest below fresh support structure, the bears will be back in control.''

''The bears would be able to position for the second attempt of a downside extension, as per the original analysis from the newly formed resistance structure on the 4-hour time frame.''

As per the prior article, ''on a subsequent retest below fresh support structure, the bears will be back in control.

The bears would be able to position for the second attempt of a downside extension, as per the original analysis from the newly formed resistance structure on the 4-hour time frame: Chart of the Week: Commodity currencies in focus, bears in control.''

In the chart above, the price has formed a fresh 4-hour lower resistance structure near 0.7370 and the 61.8% Fibonacci retracement confluence. 

Bears can look to engage again on a break of support between 0.7330/40 with a confirming lower close.

With that being said, two major risk events are on the horizon.

 Aussie Consumer Price Index and the Federal Reserve increase the prospects of high volatility which makes for a riskier set-up.  

A position at reduced risk could be the solution. 

With a focus on all that is negative for the Aussie economy and currency, the bears will be hopeful of a benign CPI event that could give way to further bearish pressures.

The best-case scenario would be for a breakeven short positing into the Fed, where quite frankly, anything could happen in markets in response to the outcome. 

On the upside for Aussie bears, the US dollar could benefit from a two-fold risk-off and hawkish-hold outcome which should see AUD/USD lower in line with the technical analysis.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

How do emotions affect trade?
Follow up our daily analysts guidance

Subscribe Today!    

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD jumps to three-week highs near 1.1650 amid falling dollar, yields

EUR/USD is trading close to 1.1650, recovering ground to clinch three-week highs. The pair cheers risk-on mood-led decline in the US dollar. Treasury yields pullback, as poor US industrial data tempers hawkish Fed’s expectations. Focus on ECB and Fedspeak.

EUR/USD News

GBP/USD extends rally beyond 1.3800 on USD selloff

GBP/USD extended its rally in the European trading hours and reached its strongest level in a month above 1.3800. The broad-based selling pressure surrounding the greenback and the BoE rate hike expectations ahead of UK CPI data fuel the pair's upside.

GBP/USD News

XAU/USD targets $1791 on turnaround Tuesday

Gold price jumps 1% as the US dollar keeps losing ground across the board. Retreat in Treasury yields, risk-on mood aid the rebound in gold price. 

Gold News

Bitcoin open interest skyrockets as investors prepare for BTC price at $250,000

The open interest of Binance and CME Bitcoin futures hit a record high of $9.2 billion when combined. Bitcoin investment products saw an inflow of over $70 million last week, ahead of the ETF approval by the SEC.

Read more

Netflix (NFLX): Will Q3 earnings after the close be enough?

Netflix (NFLX) shares continued to perform strongly on Monday with results just around the corner. The stock has been very strong for some time, setting new all-time highs on the back of the global success of Squid Game.

Read more

Forex MAJORS

Cryptocurrencies

Signatures