The end of the trading week is almost upon us. Volatility has been the rule in the forex over the past three-and-a-half sessions, having a dramatic impact upon USD sentiment. Slumping performance and a resurgence of equities have been the story of the last 48 hours. With only a few secondary U.S. economic metrics out tomorrow, USD bulls will be in counterpunch mode until Friday’s close.

Let’s take a look at the key events scheduled for the next 24 hours:

Country                        Event

Australia                       RBA Governor Philip Lowe Speech

Germany                      Wholesale Price Index (Jan.)

Eurozone                      ECB Member Benoit Coeure Speech

U.K.                               Retail Sales (Jan.)

U.S.                               Housing Starts (Jan.)

All eyes will be on the Aussie, as RBA Governor Lowe addresses the current state of the economy. Investors will be searching for clues on the future of RBA monetary policy throughout his commentary. Be on the lookout for heightened volatility in the AUD amid the speech and aftermath.

Let’s take a look at the AUD/USD technicals ahead of Lowe’s potentially market-moving speech.

AUD/USD Technicals

The recent strength in gold pricing has helped the AUD/USD post significant gains over the past week. As of this writing, price is trading between two important support and resistance levels.

It is difficult to determine which way this market is headed at the present time. The formation of a Doji on the daily timeframe is a possibility if price remains at current levels. In the event that a Doji does set up, a washout beneath today’s low may be in the cards.

Here are the key levels for the remainder of the forex session:

• Resistance(1): Daily SMA, .8024
• Support (1): Bollinger MP, .7904

Overview: A break below the intrasession low at .7891 is an ideal launch point to the bear. However, confirmation of adequate compression to play the breakout must present itself.

If the AUD/USD closes in a Doji formation on the daily chart, I will have sell orders in queue at .7890. Using an initial stop at .7926, this trade produces over 30 pips on a 1:1 R/R management plan.

Right now, it is a good idea to tread lightly when backing the USD. The motives behind the Greenback’s recent slump are a bit of a mystery. The use of moderate leverage is advised until the picture becomes a bit clearer.