The AUDUSD forex pair got a boost off the US Non-Farm Payrolls on Friday morning (April 4). The pair is currently up 0.58% to 0.9286. It traded as high as 0.93075.
While the sharp move higher was news related, it is inline with the longer-term trend which has been up since the start of the year. After a strong rally at the end of March the AUDUSD has been consolidating for the last several sessions.
Given prior strength, the expectation is that the AUDUSD will continue higher in the coming weeks. To do so it must first breakout out of this consolidation it is trading in. The former high of the consolidation was 0.9303, which was breached today, but the pair quickly pulled back into the consolidation. A major market close above 0.9307, or an intra-day push above that pulls back and holds above 0.93, provides adequate confirmation of a breakout and a continuation of the uptrend.
If the upside breakout develops, AUDUSD targets are 0.9375 and 0.9450 (see chart).
Inability to break convincingly above 0.93 indicates the pair will channel between 0.9307 and 0.92. While less likely, a break back below 0.92 signals a deeper retrace, potentially into the 0.91 region.
Disclaimer: I am currently long the AUDUSD, based on a swing trade published on April 2.
Cory Mitchell, CMT