While most currency pairs were stuck in a range, AUD/USD managed to break above a month’s range. This happened in the late hours of Friday afternoon. Though it didn’t blast the roof, this breakout repeats the pattern of the previous breakout – exactly 5 weeks ago.
After yet another week of AUD/USD range trading, Friday finally brought some news. AUD/USD made a move on late Friday afternoon, breaking above the round number of 0.85. It peaked at 0.8535 before closing on 0.8503.
Non-Farm Payrolls Circus
Non-Farm Payrolls fell by 216K jobs, better than expected. On the other hand, last month’s excellent number was revised downwards. The really bad news came from the Unemployment Rate – it rose sharply and unexpectedly higher – from 9.4% to 9.7%.
During the critical hour of the Non-Farm Payrolls release (around 12:30 GMT), AUD/USD traded wildly and eventually went down, in the low 0.84s. Around 14:00.
It made an initial move upwards at 14:00 GMT, playing with 0.8460. But the big break came only at 15:50 GMT: AUD/USD went sharply higher, above the resistance line. 25 minutes later, it already reached 0.8525.
When trading volume began declining near the long weekend, AUD/USD kept trading above 0.85, closing at 0.8503.
Second Friday Breakout for AUD/USD
AUD/USD didn’t make a huge breakout. Hundreds of pips weren’t left behind. But this move is significant since the exact pattern already happened in the near past.
On Friday, July 31st, AUD/USD was in a similar situation: it was blocked by a resistance line at 0.8230, which held strong for almost two months.
Also then, around 16:00 GMT, resistance was encountered, and AUD/USD broke above this level. It didn’t close much above it: 0.8348. Only 18 pips above the line. When trading resumed on Monday, August 3rd, the Aussie left this line behind.
Aussie Short Summary
I had a strong bullish sentiment for the Aussie. This week’s GDP reconfirmed the strength of the Australian economy once again. After breaking the technical barrier (while other currencies didn’t), it managed to close higher.
Learning from the past, this breakout is enough. AUD/USD should continue higher. The next target is around 0.88.
Further reading: Mohammed Isah with an insightful technical view of AUD/USD.
Did I mention that AUD/USD tops the list of most predictable currencies?
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