(MENAFN- Daily Forex) Bullish view
Buy the AUD/USD pair and set a take-profit at 0.6800. Add a stop-loss at 0.6625. Timeline: 1-2 days.
Bearish view
Sell the AUD/USD pair and set a take-profit at 0.6625. Add a stop-loss at 0.6800.
The AUD/USD currency pair was flat on Monday morning as traders continued focusing on the upcoming
federal Reserve and Reserve
bank of Australia (RBA) decisions. The pair was trading at the psychologically-important resistance point at 0.6700, higher than last week's low of 6620 and RBA decisions ahead
The AUD/USD exchange rate will react to important events from the United States and Australia.
The US Commerce Department will publish the August retail sales numbers on Tuesday. These numbers are expected to show that sales retreated by 0.2% in August while core sales jumped by 0.2% in the same period.
These numbers will come almost a week after another report showed that the country's inflation eased moderately in August as they fell to the lowest point since 2021.
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The Federal Reserve will use these data points when making its decision on Wednesday. Economists expect that the bank will cut rates by either 0.25% or 0.50% because of the supportive conditions.
The RBA, on the other hand, is expected to hold its monetary policy meeting next week. Unlike the Fed, analysts expect the bank to leave rates unchanged and maintain a hawkish tone since Australia's inflation has remained higher for longer.
Australia's key challenge is that China, its biggest trading partner is not doing well and is struggling to hit its 5% growth target for the year.
The other challenge for the RBA is that wage growth has remained at an elevated level for longer, meaning that inflation will struggle to drop to the bank's target of 2.0%. Australia will publish its jobs numbers on Thursday, which will provide more color about the state of the labor market in the country/USD technical analysis
The AUD/USD pair dropped to a low of 0.6621 on Monday last week and formed a hammer candlestick pattern. In price action, a hammer is a highly popular reversal candlestick pattern, which explains why it bounced back and moved above the psychological point at 0.6700.
The pair has risen above the 25-day moving average. It has also formed the handle section of the cup and handle pattern. The upper side of this pattern is around 0.6800.
Also, the Relative Strength Index (RSI) has moved above the neutral point. Therefore, the pair will likely continue rising as bulls target the resistance point at 0.6800.
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