Rising Covid cases affecting the AUD
Weekly Analysis – Covid vs the AUD
(by Eugene Voon)
This week, the only major Australian economic news is the Employment Change and Unemployment Rate releases on Thursday, 16 July 2020. A better than expected jobs number will strengthen the currency. However the more critical piece of news will be the rising number of Covid cases in Australia. Traders be aware.
Australia has managed to contain the spread of the virus effectively when the whole world saw soaring numbers but they are not spared this round when the country gradually eased the social distancing measures.
AUDUSD Daily Chart
Off the Daily chart, we can see price formed a bullish pennant and eventually broke to the upside. Last week, price attempted to move higher but ended up with little movement. This Bullish Pennant is a sign that price may move higher and therefore this pattern is no longer valid in my opinion. Current bias for AUDUSD based on the daily chart is Bullish.
AUDUSD H1 Chart
Traders who took last week’s Bearish Deep Gartley would have gotten stopped out. We win some we lose some. This week traders looking for a trade on AUDUSD can look forward to a potential Bearish Gartley which completes at the supply zone around the 0.6980 region.
AUDJPY H4 Chart
On the AUDJPY H4, we see that it is in the consolidation phase and has been moving sideways. Due to the positive correlation of AUDJPY to AUDUSD, traders should be cautious when trading the pair. The current bias for AUDJPY is bearish.
AUDJPY H1 Chart
The Bearish Deep Gartley completed last week and managed to touch TP1. Congratulations to traders who took the trade. Currently, we are seeing some retracement due to a Bullish Bat that formed sometime on Friday. Traders who wish to trade the pair will have to look for clues such as RSI Divergence if they wish to long the pair. Otherwise, there may still be room for the pair to continue downwards.
GBPAUD Daily Chart
GBPAUD has yet to complete the Bullish Bat pattern. We currently see a potential RSI Hidden Divergence and expect price to come back down to complete the pattern. We could be seeing a start of a new bullish trend. There may be a chance that price just continues towards the upside and fail to complete the reversal zone of the Bullish Bat.
Good luck everyone. Trade right and trade safe, the profits will come rolling in naturally.
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