This week we saw the Aussie Dollar gain strength against the pound. With Australia being one of the worlds biggest gold miners and with gold reaching 9 year highs this week, it’s easy to understand why we are seeing Aussie Dollar strength despite negative data releases.
Looking at the 4 hour chart above, we can see that we broke the ascending trend line, found support around 1.77000 thereafter we had a bullish engulfing and looking at current price action we could form another bullish engulfing depending on how this 4 hour candle closes. Plotting a reverse Fibonacci tool, we can see that there was a rejection just short of the 61.8 with the take profit levels lining up almost perfectly with the previous support as well as the ascending trend line.
On the 1 hour chart, we can see that we are printing spinning tops indicating that upside momentum has slowed down but if price can continue to the upside, we can see that the 61.8 lines up nicely with the previous support as well as the ascending trend line. If the ascending trend line is broken through, this trade setup would be invalidated.
The Australian Bank Quarterly Business Confidence came out negative which is why we are seeing price pull back up. From a pound perspective, their CBI Industrial Trends Orders came out negative as well and with the latest Brexit statements released today stating that no new progress has been made with regards to negotiations. There are significant data releases for the pound tomorrow with their retail sales as well as manufacturing and services PMI coming out.
Be on the lookout for any sudden price movements in the gold market when analyzing this pair. Remember to always stick to your personal trading plan and ensure that you wait for candlestick confirmation before entering any trades.