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Price Action Setup - AUD/USD Inside Bar - Downside Break? Aug. 13th

AUDUSD
As I talked about in yesterday's price action & ichimoku outlook, the price action for the Aussie communicated it was likely running out of steam and the pair may be rolling over. Although the pair hasn't made major ground or broken the key support level at 1.0496, it did form a daily inside bar.

Although this is not uncommon per se during consolidations, the fact it happened after a with trend pin bar and closed for the second day down, suggests a continual weakening in this uptrend. Keep in mind, since the June 1st pin bar and yearly bottom, there have been 52 trading days with 32 bull closes and 20 bear closes. Of those 20 bear closes, only 6 (30%) have been followed by another bear close.

From a short term perspective, there is a range in play which is the high and low of the with trend pin bar. But today's inside bar had a stronger close towards the bottom with a longer rejection wick at the top so the pressure for the day was mostly down. If the 1.0496 level fails to hold tomorrow, I'm expecting a move to 1.0445/50 which houses the daily 20ema and the Aug. swing lows so a possible level for bulls while being a nice bear target for intraday players.

(click to enlarge)inside bar pin bar price action trading 2ndskiesforex.com aug 13thClick to enlarge
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Global Market Commentary:
While summer volatility remains low and global investors sit on the sidelines, wondering when the next CB will come in and prop up the stock markets rescue distressed economies, global indices took a small pause with mild losses from Asia, to Europe and over to the US, losing anywhere from .07% - .5% so mild losses across the board.

Japan's growth was well below expectations along with Chinese consumption data also coming in sub par, hinting at a cool down in the strongest Asian economy. Frau Merkel is back from vacation and there are still doubts the High Court will consider the ESM a legal mechanism for bailing out Spain and Greece (which would put a damper in the region). Needless to say money between the regions has dried up considerably, which doesn't help distressed economies.

Speaking of Greece, as nothing has been really solved there, talks about preparing for a Grexit continue to get louder, which may be an already inevitable consequence at this point.

Although volatility has been low as of late, expect tomorrow to have a little more steam in its stride with a host of important economic events on the docket.

Upcoming Economic Events:

CNY Actual FDI (YoY) 00.00GMT 20.00EST
AUD NAB Business Confidence 01.30GMT 21.30EST
EUR French Gross Domestic Product (YoY) 05.30GMT 01.30EST
EUR German Gross Domestic Product n.s.a. (YoY) 06.00GMT 02.0EST
GBP Core Consumer Price Index (YoY) 08.30GMT 04.30EST
EUR Euro-Zone Gross Domestic Product s.a. (YoY) 09.00GMT 05.00EST
USD Advance Retail Sales 12.30GMT 08.30EST
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