The Aussie dollar is currently in an uptrend versus the US Dollar, and it looks the AUD/USD is approaching a monster break above 0.7700-0.7750.
AUD/USD Weekly Analysis – Aussie Dollar Facing Monstrous Break
· The Aussie dollar recovered well recently and traded above 0.7600 against the US Dollar.
· There is a crucial contracting triangle pattern formed on the weekly chart of AUD/USD, which may provide us a break either above 0.7750 or below 0.7500.
· The highlighted triangle is contracting, and may soon break for the next move in AUD/USD.
AUD/USD Technical Analysis
The Aussie dollar during the past few weeks traded positively and closed above the 0.7600 handle against the US dollar. The AUD/USD pair is in a clear uptrend, but it faces a critical break in the near term.
When we look at the weekly chart of AUD/USD, there is a crucial contracting triangle pattern formed with resistance at 0.7700-50, and support at 0.7500. The pair is currently testing the triangle resistance at 0.7700 and attempting an upside break.
The weekly RSI is above the 50 level, which is a positive sign, and suggesting that the pair is in a bullish trend. So, the chances of an upside break are more compared with a downside move.
Trade Idea – If you are looking to enter a buy trade, then consider it with a break above the triangle resistance (stop of around 40 pips) for a large wave up.
Today, there was a major event, which impacted the Aussie dollar. The Gross Domestic Product (GDP) in China was published by the National Bureau of Statistics of China. The market was expecting an increase of 6.7% in the GDP in Q3 2016, compared with the same quarter a year ago.
The outcome was in line with the forecast, as the Chinese GDP grew by 6.7%. The Chinese Retail Sales on the other hand surprised. It posted an increase of 10.7% in Sep 2016, compared with the same month a year ago.
Overall, the market sentiment improved for the Aussie dollar, which may help the AUD/USD pair for an upside break above 0.7700.