(
MENAFN- Daily Forex) Bullish View
- Buy the AUD/USD pair and set a take-profit at 0.6360.
- Add a stop-loss at 0.6100.
- Timeline: 1-2 days.
Bearish View
- Sell the AUD/USD pair and set a take-profit at 0.6100.
- Add a take-profit at 0.6250.
The AUD/USD exchange rate remained on edge ahead of Donald Trump's inauguration in the United States. The pair retreated below the psychological point at 0.6200, a few points above this month's low of 0.6133.
Donald Trump is expected to implement several policies impacting the American and Australian economies. Some of the most important policies will be on tariffs, which he has pledged to implement on most goods coming to the US. He aims to cut taxes to support American businesses and then set an external revenue service to coordinate tariffs.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money
Trump is mostly focused on countries that have large trade deficits with the United States like China, Mexico, and Canada. Those tariffs, coupled with his mass deportations, will lead to a higher inflation in the country.
Data released last Wednesday showed that the headline Consumer Price Index (CPI) rose from 2.7% in November to 2.9% in December. This was the third straight month that the country's inflation rose.
While core consumer inflation improved from 3.3% to 3.2%, it remained significantly higher than the Fed's 2.0% target. Therefore, the Federal Reserve will likely maintain a hawkish tone in the coming months and possibly deliver two cuts this year.
There will be no major economic numbers from the US and Australia this week. In addition to Trump's swearing in, traders will watch the happenings in Davos, where top policymakers and officials will talk and deliver their estimates for the year. The other key numbers to watch will be the flash manufacturing and services PMI data from the US and Australia/USD technical analysis
The AUD/USD pair has been in a downtrend after peaking at 0.6941 in September. It crashed below the crucial support at 0.6360 earlier this month and then bottomed at 0.6133 last week.
It has remained in a consolidation phase in the past few days, which explains why the spread of the three lines of the Bollinger Bands have narrowed. The pair has moved below the 50-day moving average, while the MACD and the Relative Strength Index (RSI) have formed a bullish divergence pattern.
Therefore, the pair, which has been in a freefall since the last US election, will likely bounce back as investors embrace the new normal in the US. If this happens, the next point to watch will be the resistance at 0.6360. A drop below the year-to-date low of 0.6135 will invalidate the bullish view.
Ready to trade our Daily Forex forecast? Here's a list of some of the t op forex brokers in Australia to check out.
MENAFN20012025000131011023ID1109107758
Comments
No comment