(MENAFN- Daily Forex) Bearish view
Sell the AUD/USD pair and set a take-profit at 0.6715. Add a stop-loss at 0.6850.
Bullish view
Buy the AUD/USD pair and set a take-profit at 0.6850. Add a stop-loss at 0.6715.
The AUD/USD pair continued soaring after signs emerged of a potential
federal Reserve and Reserve
bank of Australia (RBA) divergence. It jumped to a high of 0.6798, its highest swing since January and RBA divergence
The Fed and the RBA are moving in separate directions on interest rates. In a statement last week, Jay Powell and other Federal Reserve officials hinted that the time had come for interest rates to start falling.
The Fed is concerned that the economy is softening and that the worst could happen in the coming months. Recent data showed that labor market was deteriorating, with the unemployment rate rising to 4.3% in July, its highest level since 2021.
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The Reserve Bank of Australia (RBA), on the other hand, has hinted that it may consider hiking interest rates since inflation has remained stubbornly high this year. While most analysts don't expect the bank to hike rates, the view is that it will maintain rates unchanged for a while.
Looking ahead, the next key data to watch on Monday will be the US durable goods data, which will show the state of the US economy. The Conference Board will next release the Consumer Confidence report on Tuesday.
Consumer confidence is an important report because consumers are the biggest part of the American economy. A strong number will be a sign that the economy is doing well.
The other notable data to watch will be the upcoming personal consumption expenditure (PCE) report on Friday. This is an important report because it measures the country's inflation in rural and urban areas. More signs that inflation is falling will raise the possibility of more cuts/USD technical analysis
The Australian dollar rally continued, pushing it to the key resistance point at 0.6798. This is an important level since it was along the highest point on July 12. It was also along the weak, stop & reverse point of the Murrey Math Lines.
The pair has formed a double-top pattern, a popular bearish sign. Also, the Relative Strength Index (RSI) is nearing the overbought point while the MACD and the Stochastic Oscillator have also pointed upwards.
Therefore, the pair may see a pullback as Middle East tensions rise. If this happens, it will likely retest the stop pivot reverse point at 0.6713.
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