On Fridays, you can often sum up the preliminary results of the current week and try to predict with what achievements a particular currency pair will finish the five-day period. However, this week stands apart. As you all already know, at the economic symposium in the American town of Jackson Hole, the chairman of the Federal Reserve System (FRS) of the United States, Jerome Powell, will give a speech. As most investors and experts expect, in today's speech, Powell may indicate the timing of the start of reducing the quantitative easing or QE program. Or maybe not to designate it. In short, the results of weekly trading for all dollar currency pairs (and not only dollar ones) will depend on the rhetoric of the speech of the head of the Fed. You can learn more about this by reading today's article on the euro/dollar. Nevertheless, we will try to identify the options for the price movement of the Australian dollar in pair with the US dollar.
Daily
After the appearance of the reversal model of the "Morning Star" candle analysis, growth, and therefore the development of this model, really began. However, not everything is as simple and unambiguous as it may seem from the first time. After forming the designated figure, which consists of three highlighted candles, the pair rose to the broken support level of 0.7290, and that's it. At this stage, the ascent has ended. But whether it will continue or not will depend on the rhetoric of Jerome Powell's speech. On the technical side, the market often seems to start working out a particular model or figure. However, under some factors, it stops doing this and resumes moving along the main trend. In the current situation, I am considering two main options for the AUD/USD currency pair. The first one boils down to the fact that the pair will continue to rise, returning above the broken support of 0.7290 and above the strong technical level of 0.7300. If the upward scenario continues, the next target is the 50 simple moving average, located at 0.7395. The descending scenario and the scrapping of the Morning Star reversal figure will take place only if the support level of 0.7108 is broken and fixed under the iconic technical level of 0.7100.
Since it is not completely clear in the current situation whether the pair is correcting to its previous decline or seriously intends to change direction, that is, to turn in the north direction, both purchases and sales remain acceptable. Without taking into account the speech of the head of the Federal Reserve, technically, the opening of short positions looks good from the price zone of 0.7285-0.7340. At the same time, it would be nice to see bearish reversal candlesticks in this or smaller time intervals in the designated area. Purchases with the same confirming but already bullish signals can be considered after a short-term decline of the "Aussie" in the price zone of 0.7245-0.7230. Lower to open long positions, but again, if there are confirmation signals, you can look closely near the strong technical level of 0.7200. That's all for now. We are waiting for the speech of the Fed Chairman and the reaction of market participants to it.