AUD/USD Forex Signal Today 06/02: Bearish Setup (Chart)

(MENAFN- Daily Forex) Bearish view

• Sell the AUD/USD pair and set a take-profit at 0.6200.
• Add a stop-loss at 0.6350.
• Timeline: 1-2 days.

Bullish view

• Set a buy-stop at 0.6300 and a take-profit at 0.6400.
• Add a stop-loss at 0.6200.

The AUD/USD pair rose for three straight days as it erased most of the losses made on Monday when geopolitical risks were rising. It jumped to a high of 0.6300 on Thursday morning, much higher than the lowest level this week. So, will the pair rise or fall ahead of the US jobs numbers?

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The AUD/USD pair bounced back after ADP published strong jobs numbers that confirmed that the economy was doing well. According to ADP, the economy added 183k jobs in January after creating 176k jobs in the previous month. The figure was higher than the median estimate of 148k.

The report came as the market waited for the upcoming nonfarm payroll numbers. Economists expect the data to show that the unemployment rate remained above 4% in January as the country added over 180k jobs.

These jobs numbers are important because they are part of the Federal Reserve's dual mandate, including inflation. The Fed hopes to see progress on the labor market.

However, these numbers will likely not have a big impact on the US dollar since the labor market is still strong. The Fed is now mostly focusing on the country's inflation, which has remained stubbornly above 2% in the past few years.

The most recent report showed that the headline Consumer Price Index (CPI) rose from 2.7% in November to 2.9% in December. Core inflation has remained above the 3% level in the past few months.

The steady inflation explains why the Fed expects to hold interest rates steady for a few more months since cuts will lead to higher inflation.

The Aussie has jumped as the market focused on the ongoing trade jitters between the US and China, Australia's biggest trading partner.

EURUSD Chart by TradingViewAUD/USD technical analysis

The AUD/USD exchange rate has stabilized in the past few days as traders remain hopeful that the US and China will reach an agreement to end the ongoing trade war. It has rebounded from a low of 0.6085 on Monday to 0.6285.

The pair has remained below the 50-day moving average and the key support level at 0.6350, its lowest level in August last year. It has also formed a bearish flag pattern, a popular risky sign.

Therefore, the AUD to USD exchange rate may continue falling as sellers target the psychological point at 0.6200.

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