AUD/USD forecast: Cup and Handle Pattern Detected

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Written By: Crispus Nyaga
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    Summary:
  • A look at the AUD/USD pair shows that it has formed a cup and handle pattern. Looking ahead, the pair my break-out higher as bulls eye 0.7900

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.

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.

AUDUSD technical chart

Written By: Crispus Nyaga

Crispus Nyaga is an analyst and consultant with more than 8 years of experience. He started trading Forex while completing his BSc degree and he has worked for brokers like OctaFX, easyMarkets, & Capital. He has also contributed widely in leading websites like rkdream.com, SeekingAlpha, iNvezz, DailyForex, and BanklessTimes. In 2017, Crispus completed his MBA.

Published by
Written By: Crispus Nyaga