Two trades to watch FTSE AUDUSD

FTSE in focus after weak retail sales

The FTSE is looking to a softer start after a mixed session on Wall Street. The Fed shift continues to work its way through the market. The US Dollar trades at a 2 month high, however base commodities are recovering from recent weakness which could support the FTSE

UK retail sales disappoint falling -1.4% MoM in May, down from 9.2% in April and well below the 1.6% increase forecast.

YoY retail sales rose 24.6% in May, below the 29% expected.

Where next for the FTSE?

The FTSE is looking to extend losses from the previous session on the open. However, it so far remains within the ascending channel that it has been trading across the past month. It also trades above its 50 & 200 EMA on the 4 hour chart. The RSI is neutral at 50 providing few clues.

Whilst the FTSE holds 7125 the confluence of the 50 EMA, the lower band of the ascending channel and horizontal support, the view is still bullish. Resistance can be seen at 7170 yesterday’s high ahead of a move towards 7221.

A breach below 7125 support could see sellers look towards 7050 the 200 EMA.

AUD/USD breaches key technical level

The Fed’s hawkish shift in tone continues to boost the US Dollar, pressurizing the AUD/USD.

Australian jobs growth picked up by 115.2k and unemployment dropped to 5.1% its lowest level since February 2020. This ongoing improvement in the economy could see the RBA adopt a more hawkish tone going forwards.

For now the RBA Governor insists that its premature to consider tapering bond purchases.

The Aussie has brushed off news by Westpac that it expects the RBA to raise the Official Cash Rate (OCR) in early 2023.

Australian Dollar explained

Where next for AUD/USD?

AUD/USD is extending its selloff, falling through its 200 day moving average and hitting 0.7510 its lowest level since December and the descending trend line support.

The RSI points southwards in bearish territory and is supportive of further losses whilst it remains out of oversold territory.

Immediate support can be seen at 0.7460 the multi-month descending trendline. A breakthrough here could open the door to 0.74.

On the flipside, 0.7650 brings resistance. A breach of this level could negate the current down trend. A move over 0.7725 the 50 sma could see the bulls gain momentum.

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

Open a Forex.com account, or log-in if you’re already a customer.
Search for the market you want to trade in our award-winning platform.
Choose your position and size, and your stop and limit levels.
Place the trade.

From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.

FOREX.com is a trading name of StoneX Financial Pty Ltd.

The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.

While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.

StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment and CFD investors do not own or have any rights to the underlying assets.

It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.forex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.forex.com/en-au/terms-and-policies/.

StoneX Financial Pty Ltd, Suite 42.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.