AUDUSD has recently broken above the falling trend line visible on its 1-hour chart, indicating that a reversal is underway.

Price is showing signs of pulling back to the broken resistance area and the 61.8% Fib at the .7100 handle might hold as support.

The pair seems to be bouncing off the 38.2% Fib already, indicating that bulls are eager to charge. However, a larger pullback to the lower Fib levels closer to the moving averages is still a possibility. Both stochastic and RSI are on the move down so sellers are still in control.

Meanwhile, the 100 SMA recently crossed below the 200 SMA, indicating that the downtrend might carry on. An upward crossover might be needed to confirm that an uptrend is starting to take place.

Earlier this week, the US printed a couple of bleak figures, namely its flash manufacturing PMI for November and its October existing home sales report. For today, the CB consumer confidence numbers are due and it might show a rise in confidence from 97.6 to 99.3.

Event risks for the Aussie include RBA Governor Stevens’ speech today and quarterly private capital expenditure data lined up on Thursday. US durable goods orders data and personal income and spending reports are also up for release mid-week.

Keep in mind that the Fed is on track towards hiking interest rates in December, unless economic data hugely disappoints. Fed head Yellen recently emphasized that the path of rate hikes would be gradual, possibly to keep market expectations in check and prevent any sudden spikes in volatility.

By Kate Curtis from Trader’s Way