Trading opportunities on currency pair: the AUD/USD rate has wandered away from the upper limit of the expanding formation. If the dollar rally regains its strength, a price level of 0.7532 will be formed (a minimum from 2nd April), with an interim level of 0.7690.
Since February this year an expanding price model has been forming on the daily. From 0.8162 the AUD/USD rate has turned back. On 19th May the trend line was broken. On Friday the fall hastened after the release of some data on US inflation. Traders reacted by buying the dollar on news of a growth in inflation since this gives reason to a possible increase in interest rates in the US.
When an expanding formation appears, thoughts of a diamond pattern come with it. If the left side (from 03/02/2015 to 14/05/2015) mirrors onto the right, there’s a price level of 0.7532 (the minimum from 2nd April). If we look at a target around the lower limit of the formation, then it’s 0.7416. An interim level could be 0.7690. Before a fall to 0.7690, it’s possible there’ll be a correction to 0.7943.
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