Figure 1: AUDUSD Hourly Chart
With the release of Australia’s Trade Balance that measures the difference in value between imported and exported goods and services, it showed a much greater value of 4.36 B than the 3.75 B forecasted, thus, strengthening the AUD. Meanwhile, the value of USD depreciated over the past week with the worse than expected Unemployment Rate and Consumer Price Index which measures the cost of living. As a result, the AUDUSD pair increased in price since the 6th of April, breaking the 0.6117 resistance level before travelling towards the 0.6205 level which eventually breaks out of this level as well. The bullish momentum is evident from the “golden cross” formation where the 50 EMA crosses above the 200 EMA which occurred during the last few hours of the 6th of April. Eventually, all smaller period moving averages were positioned on top of the 200 EMA, therefore, indicating strong momentum throughout the week. This momentum is also displayed in the dominance of long bullish candles in the uptrend before reaching consolidation at 0.6350 by Friday. Hence, in the coming week, AUDUSD may decrease due to the RSI curve going into the overbought region (above the 70 level) multiple times before the market closed for the week. On the other hand, if upcoming news such as US’s Retail Sales suggests a weakening in USD while Australia shows a reduction in Unemployment suggesting the strengthening in AUD, the price of AUDUSD will continue going up.