After surging to its 14-month highs yesterday at 0.7146, AUDUSD is trading just a few pips away from this peak despite today’s disappointing retail sales report from Australia. The currency pair is currently trading at 0.7129 which is 8 pips above its opening price.
According to the Australian Bureau of Statistics, consumer spending for May only clocked in a 2.4% uptick during the month. Because this followed the 16.9% we saw in April, many analysts saw this reading as a disappointment. It could hint that the recovery from the coronavirus pandemic is slowing because consumer spending has tapered.
However, it would seem that the disappointing retail sales report has not been enough to stall the rise in AUDUSD which has mostly been driven by dollar weakness.
On the 1-hour time frame, it can be seen that AUDUSD has been consolidating after a strong upwards rally. Consequently, it would seem that a bullish pennant pattern has formed. When you enroll in our free forex trading course, you will learn that this is widely considered as a bullish continuation pattern. A strong close above yesterday’s high at 0.7146 could mean that the currency pair could soon rally to 0.7270 where it may test the 200 SMA on the weekly time frame.
On the other hand, a bearish close below the consolidation at 0.7118 could mean that there are still sellers in the market. AUDUSD could then fall lower to 0.7037 where it could retest the highs of July 15.
