AUDUSD setting up for lots of data in the new day

Technical Analysis

Sits near the middle of the May range

In the new trading day in Australia:

  • AIG manufacturing index for May will be released at 2330 GMT. Last 59.2.
  • Private capital expenditures for the 1Q will be released at 0130 GMT. The estimate is +0.5% vs -2.1% in the 4Q
  • Retail sales for April will be released at 0130 GMT as well with the estimate at +0.3% vs -0.1% last.

In addition, 

  • China’s Caixin PMI manufacturing index will be released at 0145 GMT with an estimate of 50.1 vs 50.3. The manufacturing PMI for May (from the govt) came in at 51.2 vs 51.0 est. and 51.2 last month.

That is a lot to digest by the market that has the potential to rock the AUD.  

Technically, the price today/this week tried to extend above the 200 bar MA on the 4-hour chart at the 0.7463 level. That test failed. 

On the downside, the market tried to move below the 100 bar MA on the 4-hour chart at 0.7428. The 50% of the move up from the May low is also in that area at 0.74229.  The low hit the 50% and stalled.  

We are currently trading closer to that 50%/100 bar MA area which is the low over the last fe weeks, but it is the midpoint of the month’s trading range.  That is the neutral area. That is where the market is centered before the data in the new trading day.

So the market is at a neutral area and it waits for the next clue – probably from the data.  A move lower, goes for the 0.7400 level. Below that, and the doors open to the downside with 0.7388, adn 0.73287 the next targets.  

On the topside, if there is more bullish bias in the data, that 200 bar MA  at 0.7463 will be targeted and above that the 0.7489 and 0.7517 will be target.  

That is the road map. We don’t know how the cards will fall. The numbers could come out as expected or be offsetting, but having a plan will have you prepared for the situation.   

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