We were taking a look at the hourly charts across the majors and this one stuck out.

We saw some very impressive moves last week and thankfully, we were here to offer some great trade suggestions. Every trade we highlighted last week was a profitable one and we’re looking for more of the same this week.

After the big breakdowns last week, we’re looking for some signs of retracement. We like AUD/USD because in the panic last week, a lot of Aussie positions would have likely been tossed out with anything else that looked like ‘risk’.

Now that the market has settled somewhat, the focus will shift back to fundamentals and Australian has the best fundamentals of any advanced economy.  We are aware of the upcoming Australian CPI data and we warn that the risk averse would be wise to trade around it as it has the potential to whipsaw the market.

Back to the chart…. To us, this looks like it could be the beginning of a nice short-term trade with very limited downside.

We have drawn in support from the recent lows and we note that we have seen three (or even four) consecutive higher lows. We also like the look of the reversal candelstick bottoming just below 0.9000. We have yet to see a higher high but we are encouraged that the market didn’t break down after a clear double-top at 0.9092. The market looks poised to test 0.9092 once again and if it breaks, we can see a quick run to 0.9145 (at least).  On a short-term trade, we wouldn’t risk more than the trendline shown but AUD bulls might put a stop at 0.9000.

In the medium-term, we’re still bearish on AUD but with think there’s the potential for a quick, low-risk trade here.