The Australian dollar opens the week higher as it has risen by stronger than expected retail sales today. The reading came in at 0.4% which was higher than the expected 0.3%.
Sterling also was helped by Construction PMI which released with 52.5. That was more than the forecasted 52, to give the pound a little breath.
The euro pushed higher as concerns over the political situation in Italy calmed after the anti-establishment parties reached a deal on a proposed coalition government, which deactivate fears that repeat elections could give a mandate for the country to exit the eurozone.
Trade tensions are on fire again after finance ministers from the world’s leading economies criticised America’s new tariffs on steel and aluminium imports at a G7 meeting in Canada over the weekend.
Also, trade talks between the U.S. and China on trade ended without a breakthrough, raising the danger that negotiations could collapse.
On the daily chart, the price had successfully broken the ascending trend from the high of 2017, along with the resistance level to eventually reach the key resistance of 95.15 to bounce back from there.
The price shaped a reversal pattern (wedge) which closed with a break beneath it.
With forming divergence in RSI, the price is expected to have a correction to the key support at 92.6 which is located the broken trend too.
On the daily chart, as we expected before, the pair had bounced from the ascending trend with an engulfing candle, along with breaking a descending trend, to reach our target at the resistance zone at 0.697-0.702.
According to the BAT-shaped harmonic pattern we expected, the price has already reached our first target and is expected to reach the B point at the next resistance zone of 0.7155-0.7185.
On the daily chart, as we expected the price had made its way into the resistance zone of 1.289-1.298, almost reaching the key resistance at 1.309, with an approach from the descending trend line starting from the high of 2015, and the upper edge of the horn pattern.
The price has already bounced beneath the key resistance and the resistance zone and got back above it again, but it couldn’t go much further to form a pinbar, to take the price firstly to the support level at 1.274.
On the daily chart, the price had a false break beneath the support zone 0.75-0.7535 with a pin bar.
That enhances the AB=CD harmonic pattern, with breaking a descending channel.
The pair rose with an engulfing candle above the support zone.
Along with divergence in RSI, the price is ready for the next move up to 0.774 which is a level with a combination of the lower trend line from the high of 2018 and the broken uptrend.