Audusd Getting Close To Triangle Breakout

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Audusd Getting Close To Triangle Breakout

AUD/USD Getting Close To Triangle Breakout

Last week was positive for the AUD as it recovered around 5 days' worth of losses against the USD. The reason behind this strength of AUD against the greenback was the dollar's weakness against most other currencies. The rumours of China reopening and the difficult economic situation of the USA also lent support to the AUD against the USD.

And considering the close economic relations of Australia with China, the news of China reopening was a major sentiment improver as well. Furthermore, the credit growth and Chinese inflation data were released, which also had an effect on the AUD/USD.

A closer look at the Chinese inflation data shows that it is slowing down... This tells us that markets are focusing more towards the reopening of China rather than looking at the fundamental data.

Looking ahead, the main catalyst will be the CPI numbers from the USA, which could also have a major impact on AUD/USD. In fact, the chances of AUD/USD breaking out of its triangle (technical chart pattern) are very likely after the US CPI data.

The general market consensus regarding inflation is that it will be around 6.5% (YOY Core), and as for the YOY inflation rate, the expected figure is 8%. And last but not least, several Fed speakers will also share their views which can also contribute to the AUD/USD volatility.

Triangle Pattern On AUD/USD Daily Chart

If we look at the AUD/USD daily chart, the triangle pattern becomes visible, and the price action of AUD/USD also tells us that this pattern is valid. By looking at the triangle pattern, the important levels to watch are 0.6525 and 0.6300.

If we get a clear break of this triangle pattern, the result will be a 200 pips increase in either direction. In case of bullish breakout, AUD/USD could gain 200 pips and in case of a bearish breakout, a drop of 200 pips is likely.

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