This week has started with all major dollar crosses returning back to the middle of their respective channels.
During the past week, GDP figures have been the main drivers of volatility. Drivers for price action and monetary policy as well. Past US Consumer Confidence was a strong indicator of US Economic health as well as the Retail Sales and Industrial production which more than doubled. This news is not worthy of a trend on its own, but is in fact providing for a pleasant backdrop for the buildup of economic vigor and positive sentiment.
On the news wire this week we will keep looking out for trade wars escalation. Fundamental economic data also remains an important part of our daily transactions. Additionally, political risks could affect the markets from EU elections, Great Britain’s course of action pertaining to Brexit and the Trump Administration’s Foreign policy actions. Next week we will be focused on monetary policy expectations.
The situation on the market is such that there are very few high probability trades if we are trading from the outliers of price action. One good trade that still remains to be monitored is the Australian Dollar.
AUDUSD
The Aussie is at a point of inflection. A strong level of support stands at 0.6867. This is where price stopped its fall after the RBoA announced they would be lowering interest rates. We could have a normal correction, and a slow grind sideways. But if price falls below 0.6850, we can take a quick scalp trade down to 0.6800. When setting a profit target, keep in mind the lowest the price has been in the last ten years is 0.6827.
