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Sell the aud/usd pair and set a take-profit at 0.6457. Add a stop-loss at 0.6565. Timeline: 1-2 days. Bullish view
Set a buy-stop at 0.6560 and a take-profit at 0.6650. Add a stop-loss at 0.6500. The AUD/USD pair retreated to a two-month low as concerns about the Chinese economy escalated. The pair dropped to a low 0.6510, meaning it has retreated by almost 6% from the highest level in July.China economic slowdownThe AUD/USD pair came under renewed pressure after China published another set of weak economic numbers. Data by the country's statistics agency showed that exports dropped by more than 14% while imports fell by double-digits. As a result, China's trade surplus jumped to over $80 billion.As a result, several analysts continued to downgrade the Chinese economy. In a note, those at JP Morgan estimate that the economy will grow by 5.0%, in line with what Beijing has estimated.The performance of China's economy is important for Australia because of the volume of trade between the two countries. Australia exported goods worth over $102 billion to China in 2022. Its imports totaled $82 billion. Therefore, a slowing Chinese economy means that Australia's exports will likely come under pressure. It also means that the prices of key commodities like copper, iron ore, and coal will be under pressure. The AUD/USD pair also declined as the US dollar index (DXY) and the VIX jumped. This rally happened after Moody's downgraded some top American regional banks. It also placed some big banks like State Street, PNC, and Northern Trust on watch for another downgrade.Therefore, the rate downgrade pushed more investors to embrace a risk-off sentiment. In most periods, they move to the safety of the US dollar when risks rise.AUD/USD technical analysisThe AUD/USD pair formed a double-top pattern at 0.6892. Its neckline was at 0.6596, which the pair moved below on August 2nd. In price action analysis, a double-top is one of the most accurate bearish signs. The pair also retested the neckline, which is a sign of a bearish continuation.The downward trend is also supported by the 25-period moving average . Therefore, the outlook of the pair is bearish, with the next key support level to watch being at 0.6457, the lowest point on May 31st. Ready to trade our daily forex signals ? Here's a list of some of the best forex platforms australia to check out.
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