It’s a bad day for the Aussie bulls since it seems that the bears have just taken over the trading driver seat. As you can see from the AUDUSD’s 4-hour chart, the pair appears to have broken down from a head and shoulders pattern. Remember that the Australian dollar had risen to as much as 0.9200 over the greenback early this month after touching a low of just above 0.8100 in June. though, by the looks of it, it’s luck has already turned. Yesterday’s movement pushed the prices below the pattern’s neckline and also under the previous resistance-turned-support. Given this, the price could head all the way down to 0.8500 though the previous support at 0.8600 could possibly halt its descent. In any case, things still look bearish for the AUD unless it is able to move back up above the neckline.
Due tomorrow (August 26) at 00:00 GMT and at 1:30 am GMT are Australia’s Conference Board leading index for the month of June and the country’s second quarter private capital expenditure. The CB leading index had risen by 0.3% in May though it could print a lower gain or even a contraction given Australia’s weak home loans figure and the country’s high unemployment rate. In case you do not know, home loans have fallen by 3.9% in June after posting a jump of 3.0% during the other month. Unemployment rate has also jumped to 5.3% from 5.1%. The country’s private capital investments for the 2Q, on the other hand, is projected to have expanded by 2.3% after dipping by 0.2%. Capital investments take up about 28.54 of Australia’s overall GDP or output. Hence, an increase in this number could push the Aussie higher in the near term. Though in my opinion, a hike of 2.3% or lower is not enough to push the Aussie back on the bullish track unless of course the figure prints a much stronger score. Watch out for the report tomorrow!
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