(MENAFN- Daily Forex) Bullish view
Buy the AUD/USD pair and set a take-profit at 0.6650. Add a stop-loss at 0.6500. Timeline: 1-2 days.
Bearish view
Set a sell-stop at 0.6590 and a take-profit at 0.6500. Add a stop-loss at 0.6650.
The Australian dollar remained in a tight range as traders waited for the crucial statement from Jerome Powell, the Federal Reserve Chair. They are also waiting for the upcoming US inflation and Australian jobs numbers. The AUD/USD pair was hovering at the psychological point of 0.6600, a few points below Monday's high of 6628 Powell's statement ahead
The US dollar reacted mildly to Monday's hawkish statement by Philip Jefferson, the Fed Vice Chair, and the strong inflation expectation report.
In a statement, Jefferson noted that the Fed will maintain restrictive rates for a while until it sees inflation moving to its 2% target. Jerome Powell will deliver his first statement after last week's decision on Tuesday.
Like Jefferson, he will likely hint that rates will remain at an elevated level as the bank observes inflation trends. In a report on Monday, the New York Fed said that inflation expectations remained above the Fed's target of 2.0% in the latest survey.
The next important AUD/USD news will be the US Producer Price Index (PPI) data on Tuesday followed by the Consumer Price Index (CPI) on Wednesday.
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Economists believe that inflation remained stubbornly high in April. The consensus is that the headline CPI slowed to 3.4% year-on-year in April from 3.5% in March. They also expect that the core CPI slowed to 3.6% from 3.7%.
If these numbers are accurate, they will signal that the country's inflation remained above the Fed's 2.0% target. They will also mean that the Fed will maintain its hawkish tone in the coming months.
The other data to watch will be US retail sales and the New York Empire State Manufacturing Index on Wednesday. Neel Kashkari, a key Fed official, will also talk on Wednesday.
Meanwhile, in Australia, the statistics agency will publish the latest jobs numbers on Thursday. The expectation is that the unemployment rate rose slightly from 3.8% in March to 3.9% in April/USD technical analysis
The AUD/USD pair has been in a strong bullish trend in the past few days. After dropping to a low of 0.6362 in April, the pair has rebounded by almost 4% to 0.6608.
On the 4H chart, the pair has moved above the 50-period Exponential Moving Average (EMA) . The Relative Strength Index (RSI) has remained above the ascending trendline, which connects its lowest swing since April 14th.
The MACD has remained above the neutral point. It has also formed an inverse head and shoulders pattern . Therefore, the pair will likely have a bullish breakout as traders target the neckline of the pattern at 0.6645.
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