(MENAFN- Daily Forex) Bearish view
Sell the AUD/USD pair and set a take-profit at 0.6600. Add a stop-loss at 0.6735. Timeline: 1-2 days.
Bullish view
Buy the AUD/USD pair and set a take-profit at 0.6725. Add a stop-loss at 0.6600.
The AUD/USD pair retreated to its lowest point in two weeks even after the strong Chinese trade numbers. The
exchange rate dropped to a low of 0.6650 on Wednesday morning, much lower than the year-to-date high of 6820 prices retreat
The Australian dollar dropped after the strong Chinese trade numbers. According to the statistics agency, the country's exports jumped by 8.7% in August, higher than the previous month's growth of 7.0%.
Imports, on the other hand, grew at a slower pace, rising by 0.5%, missing the analysts' estimates of 2.0%. Therefore, the trade surplus grew to over $91 billion, the highest level in months.
Chinese economic numbers are important for Australia because of the volume of goods and services that the country buys from the country. Australia sells most of its commodities like iron ore and coal to the country.
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The AUD/USD pair also retreated as commodity prices crashed. Brent, the global oil benchmark, dropped to $69 while the West Texas Intermediate (WTI) fell to $66, its lowest level in over 16 months. Iron ore prices have also dropped because of the weak Chinese demand and high inventories.
The next important data to watch will be the upcoming US Consumer Price Index (CPI) data, which will likely confirm that inflation continued falling in August. Economists expect the data to show that the headline CPI remained unchanged at 0.2% in August. They also see the CPI falling from 2.9% to 2.9% on an annual basis.
While these are important numbers, their impact on the Federal Reserve will be limited since the bank has hinted that it will start cutting rates later this month. Most analysts expect the Fed will cut rates by 0.25%.
The RBA, on the other hand, is expected to delay its rate cuts because the country's inflation has remained stubbornly high/USD technical analysis
The AUD/USD exchange rate has retreated sharply from last month's high of 0.6820 to 0.6650. This retreat happened after the pair formed a double-top chart pattern, which is a popular bearish sign.
It has moved below the 50-day Exponential Moving Average (EMA). The two lines of the MACD have formed a bearish crossover pattern while the histogram has remained below the neutral point in the last four days.
Therefore, the pair will likely continue falling as sellers target the psychological point at 0.6600.
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