Bearish view on AUD/USD presented by me in the last analysis is still not reflected on the chart. In last several hours the pair began to create a flag formation, and bulls do not want to resign to push price higher.
Bulls are also supported by Governor of Reserve Bank of Australia, Philip Lowe. He said in the morning that the Australian economy remains in good shape, and the level of inflation will be steadily increasing.
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Lowe predicts that Australia will maintain GDP growth above 3% both in 2017 and 2018 years. Better data on trade balance and increase investment in the domestic housing market should support the economy in the coming months.
The positive tone of the words of the governor of RBA was reflected in the chart. AUD/USD is gaining 0.16% already and is currently testing the upper limit of the downward channel:
Although you can expect at this point increased supply, it must be borne in mind that flag formation in most cases is a formation of continuation of the trend. However, searching for a sell signal at lower intervals you can be tempted to speculative selling AUD/USD. Usually after such violent movements caused by the statements of representatives of central banks comes a moment of disillusionment, which is often used for posting profits of earlier pulse. The range of potential declines in this area support area near 0.7600 – a level that in the last days was successfully defended by the current on the AUD/USD demand.
