AUD/USD looks set for bearish breakout through rising wedge

Australian Dollar / US Dollar (AUD/USD) continued the downside movement on Wednesday ahead of major employment reports which are scheduled for release tomorrow (on Thursday). The pair is poised for the downside breakout through the rising wedge formation on the daily chart.

As of this writing, the pair is being traded around 0.8963. Resistance may be noted around 0.9073 which is the 38.2% fibo level before 0.9121 that is the trendline resistance. A daily close above the channel resistance could expose more upside rallies targeting 0.9200.

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On the downside, support may be noted around 0.8954 that is the lower trendline support before 0.8914 that is the 23.6% fibo level support. A break and daily close below 0.8914 might extend the downside movement up to 0.8660 that is the low of the previous downside wave.

Tomorrow Australia’s statistic department will release the jobless rate as well as employment change reports According to the forecast of different economists, the jobless rate remained stable at 6% in February as compared to the same rate in January. Likewise, the number of employed people rose to 18,000 in the last month compared with 3700 decrease in January. The employment reports are considered very significant because they play crucial role in the monetary policy of the Reserve Bank of Australia (RBA).

Next week the RBA is going to release the minutes from the March monetary policy meeting. The central bank had kept the benchmark interest rate unchanged in March amid concerns about the rising unemployment in the country. The central bank predicted in the policy statement that the jobless rate could hit new highs in near future; the bank also looked concerned about the rising Aussie Dollar against the greenback. Dovish minutes could accelerate the bearish momentum in Australian Dollar and vice versa. 

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Usman Ahmed

Usman Ahmed is an individual forex trader and market analyst. He holds a Masters of Business Administration (MBA) degree. His work includes fundamental and technical reports on various currency pairs, commodity futures and stock markets. His technical analysis features price action strategies.

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