(MENAFN- Daily Forex) Bullish View
Buy the AUD/USD pair and set a take-profit at 0.6850. Add a stop-loss at 0.6700. Timeline: 1-3 days.
Bearish View
Set a sell-stop at 0.6760 and a take-profit at 0.6735. Add a stop-loss at 0.6850.
The AUD/USD pair retreated as the recent rally took a breather. After peaking at 0.6798 on Friday, the pair retreated to 0.6775 on Tuesday morning as traders assess the next policy actions by the
federal Reserve and the Reserve
bank of Australia (RBA).
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Forex Brokers1 Get Started 74% of retail CFD accounts lose money RBA and Fed Interest Rate Outlooks
AUD/USD price rose as investors assessed the recent Fed and RBA officials statements. RBA minutes released last week showed that RBA officials were considering rate hikes if inflation remained steady.
Analysts don't expect the RBA to hike rates this year. However, the base case is that the bank will be one of the last to cut in this cycle. Most analysts anticipate a cut either in the fourth quarter or in Q1 of next year.
The Fed, on the other hand, is expected to cut in its September meeting now that the economy is showing signs of weakening. For example, a report by S&P Global showed that the manufacturing PMI dropped below 45 in August.
Therefore, the AUD/USD pair retreated as the recent rally took a breather and as traders wait for additional data from the US. The Conference Board will release the latest consumer confidence data, an important report that measures how consumers feel about the economy. Ideally, highly confident consumers spend more money, boosting the economy and vice versa.
The other report to focus on will be the second estimate of US GDP data on Thursday and the personal consumption expenditure (PCE) report. The PCE report, together with next week's jobs numbers, will provide hints about the size of the Fed's interest rate cut in September/USD Technical Analysis
The AUD/USD exchange rate has bounced back sharply after falling to a low of 0.6350 earlier this month. It formed a long hammer pattern, a popular bullish sign and has bounced back to a high of 0.6800.
Its retreat happened after the pair formed a double-top chart pattern, which is often a bearish sign. On the positive side, it remains above the 50-day and 200-day Exponential Moving Averages (EMA).
The pair has alos risen above the first resistance point of the Woodie pivot point at 0.6700. Therefore, the pair may resume the uptrend but bulls need to move above the key resistance level at 0.6800. If this happens, the next point to watch will be at 0.6850.
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