AUDUSD is leading gains among the major currencies in today’s trading with a 0.43% uptick as it trades around 0.6308. The currency pair surged roughly an hour after the surprisingly stellar retail sales figures for March were released.
According to the report, consumer spending was up by 8.2% from February despite the coronavirus pandemic. There was no consensus available for this release. This is because the agency produced the report ahead of its schedule in order for policymakers to better assess the effect of their actions against the coronavirus pandemic. A closer look at the details shows that food, supermarkets, and liquor store sales drove consumer spending during the month.
On the 1-hour time frame, it can be seen that AUDUSD has recently formed higher lows after a series of lower lows. Consequently, an inverse head and shoulders chart pattern has materialized. This is widely considered as a bearish reversal indicator and the recent surge in AUDUSD was enough for the chart pattern to form. If there are enough buyers in the market, we could soon see the currency pair rally to its recent highs around 0.6395.On the 4-hour time frame, this price level also coincides with the broken trend line which could offer the currency pair with resistance.
However, it’s worth noting that AUDUSD got rejected at resistance around the 100 SMA and 200 SMA. This could be an indicator that sellers are looking to dominate trading. If this turns out to be the case, AUDUSD could fall to yesterday’s lows at 0.6252 or maybe even to 0.6207 where it topped on March 31 and April 7.More content