We are seeing an ideal technical setup on AUD/USD .
In addition, we do have the US Core CPI and Core Retail Sales data coming in on Friday.
The release of these economic data might act as a potential catalyst to strengthen the US Dollar , potentially giving us a nice confluence for the short setup on AUD/USD .
On the AUD/USD H4 chart, price has been ‘crawling’ higher. This is a term that we use to describe price losing momentum as it continues to move higher.
We are also seeing a divergence forming. Adding on to our technical confluence, price has also reached the key fibonacci area between the 100% to 123.6% extension.
All these gave us an ideal technical sell setup on the AUD/USD .
What we need is a potential catalyst to push price down impulsively; and we are expecting the catalyst to come from Friday’s US data.
Core CPI and Retail Sales are forecasted to come in at 0.2% and 0.4% respectively. Should the actual data come in higher than the forecast, we will have a strong reason to take the short trade on AUD/USD , potentially targeting 0.7641 – 0.7685 area.