AUD/USD Forms a Bullish Continuation Pattern but Traders Remain Cautious Ahead of the G20 Summit
Skerdian Meta • 1 min read
AUD/USD has moved lower in the last two days after it surged more than 100 pips higher on Wednesday on Powell’s comments that the FED interest rates are near neutral. But it has now formed a bullish continuation pattern on the H1 chart. I would say it is a bullish reversal pattern, but since this pair is already on a bullish run, then this is a bullish continuation chart setup.
As you can see from the H1 chart above, the stochastic indicator is severely oversold on this time-frame, which means that the retrace lower is complete. If you switch to the H4 chart, you can see that stochastic is almost oversold there as well, so the bearish retrace is almost complete there too.
Besides, the previous H1 candlestick closed as a pin/hammer which are bullish reversing signals after the bearish move. This chart setup is also taking place right above the 50 SMA (yellow) which is providing support right now.
But, don’t expect much price action today. I don’t think we will see big moves because, as we mentioned in other forex updates, the G20 summit has already started in Argentina, which will continue over the weekend. The main issue there is the US-Chinese trade war.
If the war precipitates, then the Aussie and the Kiwi will crash lower because it means that China will import less from New Zealand and Australia which supply China with raw materials.