(MENAFN- Daily Forex) Bullish view
Buy the AUD/USD pair and set a take-profit at 0.700. Add a stop-loss at 0.6800. Timeline: 1-2 days.
Bearish view
Sell the AUD/USD pair and set a take-profit at 0.6785. Addd a stop-loss at 0.700.
The Australian dollar is in its third consecutive week of gains after Beijing announced a big stimulus and after the country's central
bank left interest rate unchanged. It soared to a high of 0.6883, its highest point since July 14 last year stimulus and RBA decision
The AUD/USD currency pair continued surging after China unveiled a big stimulus to boost an economy that is struggling.
As part of the stimulus, the central bank lowered the amount of cash that banks are supposed to hold by 0.50%, a move that will free about $142 billion for new lending.
This stimulus led to an immediate increase in the prices of key commodities like iron ore and coal as investors anticipated more demand. Still, some analysts are questioning whether the package came too late.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money
A stimulus in China is often seen as a good thing for Australia since it is its biggest trading partner.
The AUD/USD pair also rose after the RBA decided to leave interest rates unchanged and hinted that cuts were unlikely in the near term. In her statement, Governor Michele Bullock noted that, unlike in other meetings, the bank did not consider hikes.
The statement confirms that the RBA will be one of the last major central banks to cut interest rates. Other similar banks, including the Federal Reserve and the Bank of England have started cutting rates.
Meanwhile, in the US, a report by Conference Board noted that consumer confidence dropped to its lowest point in three years as concerns about the labor market continued. It dropped to 98.7, missing the analysts estimate of 103.5.
The report reinforces the Fed's view that the labor market is a big concern, meaning that it will likely continue cutting rates this year/USD technical analysis
The AUD/USD rally accelerated after the RBA interest rate decision. It flipped the crucial resistance point at 0.6821, its highest swing on August 29, invalidating a double-top chart pattern.
The pair has moved above the 50-day moving average and the important resistance level at 0.6871, its December last year high. Also, the pair has moved above the ultimate resistance of the Murrey Math Lines.
The MACD and Relative Strength Index (RSI) have pointed upwards while the Average Directional Index (ADX) remains above 20.
Therefore, the pair will likely continue rising as bulls target the next psychological point at 0.7000.
Ready to trade our free trading signals ? We've made a list of the top forex brokers in Australia for you to check out.
MENAFN25092024000131011023ID1108712747
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.