Technicals and Fundamentals Push the AUD Higher

Today’s Reserve Bank of Australia (RBA) meeting minutes happened to be much more hawkish than expectations. It was said that there is still room for the rises, which was positively received by market participants. A hawkish RBA along with the great data from the Australian job market was a sweet combination for local traders and a great fundamental support to an interesting technical setup.

The AUDUSD now has a proper buy signal. It’s coming from the inverse head and shoulders pattern (yellow), which emerged in July. The formation is already up and running, as today, the price broke its neckline (blue). Apart from breaking the neckline, the price also broke two down trendlines (red and black), so I guess buyers have what it takes to pull the price higher in the next few days.

The sentiment remains positive, as long as the price stays above the blue neckline. A drop below that is of course possible but not really probable. But, if it were to happen, the buy signal would be cancelled.