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Buy the AUD/USD pair and set a take-profit at 0.6580. Add a stop-loss at 0.6450. Timeline: 1-2 days.
Set a sell-stop at 0.6500 and a take-profit at 0.6400. Add a stop-los at 0.6600.
The Australian dollar sits at an important resistance level ahead of a relatively muted week with no major economic data. The AUD/USD exchange rate was trading at 0.6513, much higher than last month's low of 0.6267. It is hovering near the highest point since August 11th minutes ahead
The Australian dollar continued its recovery last week after the statistics agency published strong jobs numbers on Friday. The data revealed that the economy added over 55k jobs in October, higher than the estimated 24k. In the same period, the unemployment rate rose to 3.7% as more people hunted for work.
These numbers show that the economy is doing modestly well even though inflation is a big challenge. The data came a few weeks after the Reserve Bank of Australia (RBA) delivered its interest rate decision. In it, the bank diverged with other central banks like the Fed and BoE as it decided to raise rates by another 0.25%.
Analysts are mixed about what to expect in the next meetings. Most of them expect the bank to leave interest rates unchanged in the December meeting. The next possible hike will happen in February after the statistics agency publishes its next quarterly inflation report.
The AUD/USD pair also rose after the strong Chinese economic data. These numbers revealed that the economy was recovering albeit at a slow pace. Industrial production and retail sales bounced back in October. Chinese numbers are important because the country is the biggest buyer of Australian goods.
There will be no important data from Australia this week. Therefore, traders will focus on Wednesday's minutes by the Federal Reserve. These minutes will shed more light on the deliberations that happened in the last meeting. They will also provide more guidance on what will happen in the next meetings/USD technical analysis
The AUD/USD pair has made a strong rebound recently and is now sitting at an important resistance point. It was trading at 0.6520 on Monday, where it has failed to move above since August this year. The pair is supported by the 25-period and 50-period moving averages and is slightly above the 38.2% Fibonacci Retracement level.
Further, the pair has entered in the third phase of the Elliot Wave pattern while the Relative Strength Index (RSI) has drifted upwards. Therefore, the pair will continue rising in the coming days. If this happens, the next price target will be the 50% Fibonacci Retracement point at 0.6580.
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