AUD/USD Forex Signal: Gartley Pattern Points to More Upside
The pair will likely resume the upward trend as bulls target the important resistance at 0.7550.
Bullish View
Set a buy-stop at 0.7495 and a take-profit at 0.7550.
Add a stop-loss at 0.7400.
Timeline: 1-2 days.
Bearish View
Set a sell-stop at 0.7450 and a take-profit at 0.7400.
Add a stop-loss at 0.7500.
The AUD/USD price retreated slightly as traders looked at the happenings in Australia where New South Wales (NSW) reported more COVID cases. The pair will also react to important economic data from the US, Australia, and China later this week.
Australia COVID Cases
The AUD/USD has struggled lately as the Australian government battled a new wave of coronavirus. Local governments in NSW even returned some travel restrictions that were supposed to end this week. This seems to be highly unlikely as the number of cases increases.
According to the government, NSW reported 112 cases in the past 24 hours. At the same time, Victoria and Queensland have reported no cases. Subsequently, Victoria has banned residents from NSW from entering the state. Victoria residents returning home will also need a permit and go to a 14-day quarantine. In all, these measures will affect the Australian economic recovery.
Later this week, the AUD/USD will react to the latest Australian jobs data that will come out on Thursday. Economists expect the data to show that the Australian unemployment rate declined from 5.1% in May to 5.0% in June. They also expect that the participation rate rose from 66.2% to 66.3% as the country added more than 30,000 jobs.
On the same day, the pair will react to the latest China GDP data. Estimates are that the economy expanded by 8.1% while industrial production slowed to 7.9% in June. Macro data from China are important because of the vast amount of resources that China buys from Australia.
The AUD/USD will also react to the data dump from the US. On Tuesday, the statistics bureau will publish the latest consumer inflation data. Economists expect that the headline CPI rose by 4.9% in June while core CPI rose by 4.0% on a year-on-year basis. The US will also publish retail sales numbers on Friday.
AUD/USD Technical Analysis
The AUD/USD pair declined slightly during the Asian session. On the four-hour chart, the pair has formed a bullish Gartley pattern and is slightly above the 25-period and 15-period exponential moving averages (EMA). It is also below the important resistance shown in orange while the MACD pattern is rising. Therefore, the pair will likely resume the upward trend as bulls target the important resistance at 0.7550. On the flip side, a drop below 0.7450 will invalidate this prediction.
Nasdaq 100 Index Forecast: “Shooting Star” Warns of Pullback But Uptrend Remains Intact
Nasdaq 100 index Technical Forecast: Bearish
The Nasdaq 100 index saw a “Shooting Star” candlestick forming on the daily chart
This may be a warning sign of a minor pullback if upward momentum is exhausted
The overall bullish trend remains largely intact however, and the index may head towards fresh records later on
Chart by TradingView
The Nasdaq 100 index extended higher into record territory towards the weekend, but the formation of a “Shooting Star” candlestick may flag risk of a minor technical pullback. A “Shooting Star” is a bearish candlestick that usually appears at the end of an uptrend. It has a long upper shadow, small lower shadow and a small body near the low of the day.
A “Shorting Star” is inherently bearish because it suggests that prices attempted to rise significantly during the day, but then sellers took over and pushed prices back down toward the open. Therefore it hints at strong selling pressure and indicates that profit-taking activity may have ramped up after a period of gains. Read more about this pattern by visiting DailyFX’s education portal.
The overall trend remains bullish-biased however, as the index formed consecutive higher highs and higher lows over the past few months. The index breached a key resistance level at 14,000 last week, carving a path for prices to move higher towards 14,400 and then 14,950 – the 268.1% Fibonacci extension. In the event of a near-term pullback however, prices may retreat to the 24,000 area looking for support.
The index is riding an upward trend after forming a “Double Bottom” chart pattern. A “Double Bottom” is usually found at the end of a downtrend and resembles the letter “W”, as highlighted in the chart above. It serves as a popular bullish reversal signal, suggesting that the consolidation phase following a bearish “Gartley” pattern has come to an end.
The MACD indicator breached above the neutral midpoint and is trending higher, underscoring upward momentum.
— Written by Margaret Yang, Strategist for DailyFX.com
To contact Margaret, use the Comments section below or @margaretyjy on Twitter
NZD/USD spikes as RBNZ scales down its asset purchase program
US stocks declined while the greenback soared after the latest US consumer price index (CPI) data. The Bureau of Labor Statistics (BLS) data showed that the headline consumer inflation rose by 5.4% in June, the highest level since August 2008. This increase was mostly due to soaring prices for used cars as the sector continued facing significant supply costs. This increase was also due to the rising commodity prices, robust consumer demand, and ongoing logistics challenges. According to the WSJ, economists expect that the economy expanded at a 9.1% annual rate in the second quarter. This will be the fastest quarterly increase since the early 1980s. Therefore, the Fed will be under pressure to act in the next few months to curb prices.
The Dow Jones, S&P 500, and Nasdaq 100 futures bounced back in the overnight session after Senate budget committee approved a $3.5 trillion plan. The new package will see the government spend money to fund climate, education, and anti-poverty programs. The indices also tilted higher as the bank earnings season kicked off. Goldman Sachs and JP Morgan released strong earnings, helped by the deal-making segment. Goldman made more than $5.49 billion in profit on revenue of $15.39 billion. JP Morgan, on the other hand, made a profit of $11.95 billion and revenue of $30.48 billion. This happened as the global deal volume surged to $1.42 trillion in the quarter. Later today, companies that will publish their results are Blackrock, Citigroup, and PNC Financial.
The NZDUSD pair jumped in early trading after relatively hawkish New Zealand central bank news. The bank decided to leave the interest rate unchanged at 0.25%. The key point of the decision was that the bank decided to halt its Large Scale Asset Purchase (LSAP) program later this month. It attributed this to the strong recovery of New Zealand’s economy. Later today, the Bank of Canada and Turkish Central Banks will deliver their decisions. The UK will also publish the latest inflation data while the Fed will release its Beige Book.
NZD/USD
The NZDUSD spiked after the RZ decision. It rose to 0.7013, which was higher than this week’s low of 0.6917. On the four-hour chart, the pair moved to the upper side of the Bollinger Bands. It also rose above the 25-day moving average. Notably, it has also formed Gartley’s XABCD pattern, which is typically a bullish sign. Therefore, the pair will likely keep rising as bulls target the next key resistance at 0.7050.
EUR/USD
The EURUSD pair declined sharply after strong US inflation data. The pair fell to 1.1776, which was the lowest level since April 1. The pair moved below the important support at 1.1750 and the short and longer-term moving averages. The MACD and the Relative Strength Index (RSI) have also declined. Therefore, the pair will likely keep falling as bears target the next key support at 1.1700.
US 30
The Dow Jones declined to a low of $34,890 on Tuesday. It then erased some of those gains after the new $3.5 trillion spending package. The index remains above the 25-day and 50-day moving averages while the MACD has continued rising. As a result, there is a possibility that it will keep rising as bulls target the next key resistance at $35,000.