AUD/USD: Slow Increase in Price as Market Conditions Disrupted by US Banking Crisis

Bearish View

• A bearish reversal on the H1 period might occur at $0.6719, $0.6748, or $0.6786.
• Set your stop loss one point above the current swing high.
• If the trade has generated a 20 pip profit, move the stop loss to break even.
• When the price reaches 20 pip, take a 50% profit and let the remaining 50% run.

Bullish View

• On the H1 period, watch for a positive reversal at $0.6599 or $0.6553.
• Set your stop loss one pip beneath the current swing low.
• When the trade is 20 pips in the green, move the stop loss to break even.
• When the price reaches 20 pip, take 50% of the profit and let the other half run.

Earlier today, the Australian dollar responded positively to mixed but overall optimistic Chinese activity data, which highlighted a significant improvement in construction project investments with a rise in fixed asset investment to 5.5%. This raised hopes for Australian commodity exports, as China is the country’s largest importer of commodities. However, the economic calendar later today is solely focused on US data, with PPI and retail sales reports for February expected to show lower figures than previous releases, potentially weakening the USD. Despite yesterday’s US CPI report providing little guidance, uncertainty remains around the Fed’s plans. Additionally, the recent collapses of Silicon Valley Bank and Signature Bank are being scrutinized for their potential systemic impact on the global economy.

The price of the AUD/USD currency pair has been rising slowly and weakly lately. This is because the US banking crisis has disrupted the normal relationship between risk-on (stronger AUD) and risk-off (stronger USD). It’s a good idea to have a backup plan just in case. A negative reversal from the price’s approach to the $0.6719 resistance level may offer a favourable opportunity for a short trade entrance. Yet given the volatile price activity today, it might be more profitable to hunt for trade opportunities in other markets.

Relevant news