AUDUSD Retreats as Bears Control the Game
The AUD/USD pair bounced from the lows after the Non-Farm Payrolls report in the United States revealed that the economy added more jobs in June than the market expected. Moreover, the technical picture also supports the bounce, as a bullish divergence formed at the lows.
The RSI suggested a possible bounce last Friday, and the bid behind the AUD/USD should continue. The US markets are closed today in observance of Independence Day in the United States, so the AUD/USD will likely remain bid in the absence of news out of the United States.
Still on the fundamental side, the RBA rate statement is due in the next Asian session, together with Governor Lowe’s speech about the monetary policy decision. Volatility, therefore, will be on the rise in the upcoming session, so traders might want to have a tight stop in order to avoid large drawdowns.
The technical picture looks bullish here as long as the AUD/USD does not make a new lower low. In other words, last Friday’s lows should act as an invalidation for any bullish trade.
Conservative bulls may want to wait for the pair to break above 0.7600 before going long with a stop at 0.75 and a take profit set by using a risk-reward ratio of 1:2.
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