AUD/USD Price Analysis: Inside day Friday opens risk of a lower close on Monday, 0.7050 eyed

AUD/USD was the best performer for the G7 last week and AUD/USD bulls could be trapped up high for the week ahead which holds a number of key data events. The following illustrates a bearish bias for the initial balance of the week, Monday with 0.7050 eyed. 

AUD/USD H1 chart

As per the above daily template on the hourly chart, we can see that the pair is consolidating at the top of 5 days of higher closes followed by the first red day, FRD, on Friday. An FRD is usually followed by a second, or third day of bearish closes which gives the bias for the day ahead, down.  This can serve to help traders identify higher probability trade setups as they plan for the day, if not the day's ahead. In this particular scenario, Friday closed as an inside day. Inside days are often followed by a breakout of the highs or lows, one way or another.

During the last hours of Friday's business, there was a pump up from the lows of the day (that followed the dump) as follows:

As illustrated, the break of structure, BoS, around 0.7100 was followed by a correction, the pump, into a 61.8% Fibonacci retracement that has acted as resistance on a stop hunt above 0.7100. This could be the makings of the opening dump in Asia. 

If Asia opens on the offer then a downside extension to test the previous day's lows near 0.7080 with eyes lower to 0.7070 (-272% Fibo). This is where bulls would be expected to engage in London to move into the Asian session's range and if the day is going to close lower then New York traders will be looking to fade the market on tests of 0.7100 and a close below Friday's close of 0.7108.

This leaves risks of a move towards 0.7050 for the initial balance for the week. The daily average true range is around 80 pips, so a move much higher than 0.7130 would not be expected whereas 0.7050 is eyed in this bearish thesis.