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AUD/USD forecast: Cup and Handle Pattern Detected

The AUD/USD rose today as investors reacted to the latest Australian retail sales numbers. The AUDUSD is trading at 0.7772, which is slightly above this week’s low of 0.7725. 

AUD/USD news: The most important news of the day was the latest Australian retail sales. According to the Australian Bureau of Statistics (ABS), the overall sales rose by 0.6%, short of the expected 2.0%. This was nonetheless a better number than the 4.1% decline in December. 

Another important data from Australia was the flash manufacturing and services PMI data. According to Markit, the two PMIs fell to 56.6 and 54.1, respectively. A PMI figure of 50 and above is a sign that an industry is growing. These numbers came a day after the country published the latest employment numbers.

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AUD/USD forecast

The AUD/USD price has been on a steady increase in the past few months, helped by a relatively weak US dollar and higher commodity prices. The pair reached a multi-year high of 0.7820 in January and then pared those gains, falling to 0.7562. Since then, the pair has crawled back and formed what looks like a cup and handle pattern. 

Therefore, in the near term, the pair will likely break-out higher as investors target the next resistance at 0.7900. However, a drop below 0.7720 will invalidate this trend.

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AUDUSD technical chart

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