AUDUSD: Recent Bullish Sessions Not Enough to Signal Buy
10 May 2023
May has been a great month so far for the Australian Dollar against the US Dollar, with six consecutive bullish sessions on the AUDUSD pair until yesterday. However, this does not necessarily mean that it is a good time to buy the pair. While the recent upswing has been technically impressive, it does not signify a significant change in trend. The price is still range-bound between the 61.8% and 38.2% Fibonacci levels. The rise from early May was merely a bounce from support to resistance.
For a proper buy signal, the price must break above the 38.2% Fibonacci level, while a drop below the 61.8% level would indicate a sell signal. Additionally, a strong rebound from the 38.2% level could be considered a trigger to go short.
To determine the direction of the pair, the inflation number from the US, which will be released before the start of the American session, should be monitored closely. This event will certainly have an impact on the USD and may influence the direction of AUDUSD as well.
Therefore, it is advisable to wait for a clear breakout before taking any positions on the AUDUSD pair, while keeping an eye on the upcoming economic events that may impact the pair's movement.