AUD/USD Breaks Below Triangle Pattern Amid Strong Dollar and Weak Australian CB Leading Index
Last Updated on November 24, 2021
Australia – CB Leading Index
On Tuesday, at GMT 3:30 p.m., the Conference Board Inc released the month-over-month leading index for Australia. It measures the changes in the level of a composite index based on seven other major fundamental indicators.
The CB leading index aggregates some of the other indicator data. So, CFD traders consider this to be an important representation of the overall Australian economy. However, since most of these data are previously released, the CB leading index tends to have a minimized immediate market impact.
Last month, the CB leading index came out at 0.3%. This month, it fell considerably and came out at 0.1%.
United States – Core Durable Goods Orders
On Wednesday, at GMT 1:30 p.m., the US Census Bureau released the month-over-month core durable goods orders figure. It measures the changes in the total value of all new purchase orders made to the US manufacturers for durable goods over the past month. However, the US Census Bureau excludes goods from the transportation sector in this figure in order to offer an accurate picture.
Forex traders consider the US core durable goods orders to be the primary gauge of the production situation in the economy. It is because an increase in purchase orders indicates that US manufacturing activity and growth will happen in the near future.
Last month, the US core durable goods orders increased by 0.5%. Analysts were expecting it to increase by 0.5% this month. The actual figure matched analysts’ expectations and came out at 0.5%.
The AUD/USD remained in a strong downtrend since the end of February 2021. Over the last two quarters, its price declined by around 900 pips or 11.20%. Since the end of August, the AUD/USD started a bullish retracement and formed a symmetrical triangle. Last week, the AUD/USD broke below the triangle. Currently, it is approaching the support near the 0.7170 level.
The Australian CB Leading Index grew at a much slower pace compared to last month, at 0.1%. By contrast, the Core Durable Goods Orders came out in line with expectations at 0.5%. We believe it would set a bearish fundamental outlook for the AUD/USD this week. Therefore, if the AUD/USD closes below the support near 0.7170, it would likely attract additional bearish momentum in the market. However, keep in mind that the RSI indicator is hovering near the oversold area and there could be a strong bullish spike.
Hence, CFD traders should look out for trading opportunities below this major support level around 0.7170.
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