AUD/USD Forex Signal Today 16/07: Set To Rebound (Chart)

(MENAFN- Daily Forex) Bullish view

• Buy the AUD/USD pair and set a take-profit at 0.6600.
• Add a stop-loss at 0.6400.
• Timeline: 1-2 days.

Bearish view

• Sell the AUD/USD pair and set a take-profit at 0.6400.
• Add a stop-loss at 0.6600.

The AUD/USD exchange rate pulled back for the third consecutive day after China published mixed economic data and after the US released its June consumer inflation report. It dropped to 0.6515, down from the year-to-date high of 0.6590.

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The AUD/USD exchange rate retreated after a Chinese economic report showed that the economy was doing well. This report showed that the unemployment rate remained unchanged at 5.0% in June.

China's economy grew by 5.2% in Q2 after growing by 5.4% in the previous quarter. This growth was better than the median estimate of 5.1%. Another report showed that retail sales rose by 4.8% in June, missing the analysts estimates of 4.8%.

Chinese economic numbers are significant for the AUD/USD pair because China is Australia's largest trading partner, accounting for the majority of its commodity and service imports.

The AUD/USD exchange rate also retreated after the US published the latest inflation data. According to the Bureau of Labor Statistics (BLS), the headline consumer inflation rose from 2.4% in May to 2.7% in June, matching analysts' estimates.

Most importantly, core CPI, who strips the food and energy products, rose from 2.8% in May to 2.9% in June. It moved from 0.1% to 0.3% on a month-on-month basis, missing estimates for the fifth consecutive month.

These numbers, together with the recent nonfarm payrolls (NFP) data, mean that the Fed will start to cut interest rates in September this year.

The next key catalysts for the AUD/USD pair will be the upcoming producer price index (PPI) data. Other top data to watch will be the US manufacturing and industrial production numbers.

EURUSD Chart by TradingViewAUD/USD Technical Analysis

The daily chart shows that the AUD/USD exchange rate pulled back from the year-to-date high of 0.6590 to 0.6517. It has retested the lower side of the ascending channel and moved below the 61.8% retracement point at 0.6553.

The pair remains above the 50-day Exponential Moving Averages (EMA), a sign that the bullish trend remains.

Therefore, the pair will likely bounce back, and potentially retest the key resistance point at 0.6600. A move above that level will point to more gains, potentially to the resistance point at 0.6677, the highest point on November 7.

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