AUD/USD Forex Signal: Shooting Star Pattern Points To A Drop| MENAFN.COM

Wednesday, 01 February 2023 01:48 GMT

AUD/USD Forex Signal: Shooting Star Pattern Points To A Drop


(MENAFN- Daily Forex) Advertisement got a position to try? don't wait! trade aud/usd now Bearish view
  • Sell the aud/usd pair and set a take-profit at 0.700.
  • Add a stop-loss at 0.7115.
  • Timeline: 1-2 days.
Bullish view
  • Set a buy-stop at 0.7100 and a take-profit at 0.7200.
  • Add a stop-loss at 0.700.

The Australian dollar recoiled against the US dollar after the relatively strong consumer inflation data and weak new home sales numbers. The AUD/USD fell to 0.7064, which was a few points below this week's high of 0.7115.Australian inflation puts RBA under pressure

The Reserve Bank of Australia has been working hard to lower the soaring inflation. To achieve that, the bank has delivered a series of rate hikes since May last year. Now, it seems like the bank has more work to do considering that Australia's inflation remains at an elevated level.

Data published on Wednesday showed that the headline consumer price index (CPI) rose from 7.3% in Q3 to 7.8% in Q4. That was a significantly strong number considering that analysts were expecting the figure to come in at 7.5%. On a QoQ basis, inflation rose by 1.9%.

The closely-watched trimmed-mean CPI rose to 6.9% while the weighted mean CPI jumped to 5.8%. The trimmed figure is important since it excludes some of the most volatile items like food and petrol. These numbers mean that the RBA is between a rock and a hard place considering the country's economy is struggling.

For example, the rate-sensitive housing sector has seen prices plunge in the past few months. Data published on Wednesday revealed that sales of newly built and existing home sales plummeted in December as demand dried out. As such, more rate hikes could lead to a severe hard landing in the country.

The AUD/USD price will next react to the upcoming data dump from the US. The various statistics agencies will publish the latest new home sales, jobless claims, GDP, and durable goods order numbers. GDP statistics will be important since they will be the first estimates of how the economy performed.AUD/USD forecast

The AUD/USD price formed a shooting star pattern whose highest point was at 0.7115. In price action analysis, this is usually one of the most accurate bearish signals. As it dropped, it retested the important point at 0.7065, which coincided with the highest level on January 18. This was also the upper point of the double-top pattern.

The pair has also formed an ascending widening wedge pattern, which is another bearish sign. Therefore, there is room for more downside, with the next reference level being at 0.700.

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