Baxia Markets
October 25, 2023

Bullish Momentum in AUDUSD Fueled by Economic Data Surprises

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AUDUSD faced a deluge of high-impact news today, and to traders' delight, each report exceeded economic forecasts. Australia's Consumer Price Index (CPI) climbed to 1.2%, surpassing expectations by 0.1%. The market reacted with a robust bullish candle during the Asian trading session. However, the ascent was short-lived, and a correction ensued. A key support level to monitor is in the vicinity of 0.6361-0.6379. If this level remains intact and finds support from the oversold stochastic indicator, it could present a long opportunity during New York trading hours. The upcoming release of US data related to new home sales will likely be a focal point. Economists anticipate a significant reduction in new home sales, potentially reaching -11%.

Bullish Momentum in AUDUSD Fueled by Economic Data Surprises

AUDUSD Price Action

On the hourly timeframe, a golden cross between the EMA 50 and EMA 200 signals a resurgence of bullish sentiment. These EMA levels can serve as strong support, as the market frequently retraces following a golden or death cross. Sustaining these EMA levels could lead to higher highs for this currency pair.

Analyzing candlestick patterns, a Marubozu candlestick during the Asian trading session indicates bullish sentiment. However, the subsequent candle took the form of a doji, with its open and close contained within the Marubozu candlestick, resembling a harami candlestick pattern variation. This indecisive doji, despite exceeding the high of the Marubozu, does not imply a reversal but could suggest a sideways move, provided the price remains above the Marubozu's low.

In terms of the MACD, both the histogram and the signal line are positioned above the 0 line, reinforcing the bullish scenario. However, if the histogram descends beneath the signal line, it may suggest a bullish correction before establishing new highs. It is imperative to monitor these indicators and ensure they do not cross the 0 line.

Stochastic indicators were in overbought territory during the Asian trading range. Presently, they are descending, potentially heading towards oversold territory. Traders are keeping a close eye on this oversold zone, anticipating a bullish reaction that may lead to new higher highs.

Economic Releases to Watch Today


Actual 5.4% vs Forecast 5.3%

USD, New home sales

Forecast -11% vs Previous -8.7%

CAD, Interest rate decision

Forecast 5% vs Previous 5%

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