AUD/USD Forex Signal Today 02/06: Stuck In A Range (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the AUD/USD pair and set a take-profit at 0.6540.
• Add a stop-loss at 0.6350.
• Timeline: 1-3 days.

Bearish view

• Sell the AUD/USD pair and set a take-profit at 0.6350.
• Add a stop-loss at 0.6540.

The AUD/USD exchange rate has remained in a tight range since the first week of May as investors watch key economic data, trade-related news, and monetary policy between the US and China . It has pulled back to 0.6430 after hitting its highest point since November in May.

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The AUD/USD pair retreated to 0.6430 after some economic data from Australia pointed to economic softening. According to the Australia Bureau of Statistics (ABS), retail sales dropped by 0.1% in April after growing by 0.3% in the previous month.

Building permits, which are good indicators of the real estate sector, dropped by 5.7%, missing the estimated growth of 3.16%.

These numbers mean that the Australian economy, while resilient, is softening, This, in turn, may push the Reserve Bank of Australia (RBA) to deliver more interest rate cuts later this year. It slashed rates by 0.25% in the last meeting, bringing the official cash rate to 3.85%.

Analysts now expect the bank to deliver more rate cuts in the coming meetings. Such a move will likely increase more spending, which will in turn boost the economy.

The next key AUD/USD news from Australia will be the upcoming minutes of the last meeting. These minutes will provide more information on what to expect in the coming meetings.

The pair will also react to Monday's US non-manufacturing PMI report by the Institute of Supply Management (ISM). These numbers are expected to show that the manufacturing PMI softened to 48.7 in May as companies dealt with Trump's tariffs. A PMI reading of less than 50 is a sign that a sector is not growing.

EURUSD Chart by TradingViewAUD/USD technical analysis

The daily chart shows that the AUD/USD pair was trading at 0.6430 on Monday, down from last month's high of 0.6540. It has remained inside the ascending channel shown in black for weeks.

The pair has also moved slightly above the 50-day Exponential Moving Average, a sign that bulls remain in control for now. It has also formed an inverse head and shoulders pattern, a popular bullish continuation sign.

Therefore, the pair will likely remain in this consolidation in the next few days, and then it will bounce back to 0.6540. More upside will be confirmed if it rises above that level, while a drop below the 50-day moving average at 0.6385 will point to more downside.

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