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MENAFN- Daily Forex) Bullish view
Buy the AUD/USD pair and set a take-profit at 0.6750. Add a stop-loss at 0.6625. Timeline: 1-2 days.
Bearish view
Sell the AUD/USD pair and set a take-profit at 0.6625. Add a stop-loss at 0.6750
The AUD/USD exchange rate continued its strong rally, reaching its highest level since October last year as the US dollar dropped against most currencies ahead of the upcoming Federal Reserve interest rate decision. It rose to a high of 0.6675, up by 12.8% above the lowest level this year Dollar Surges Ahead of the Fed Decision
The AUD/USD exchange rate continued its strong uptrend as the US dollar dropped ahead of the upcoming Federal Reserve interest rate decision.
The performance coincided with a risk-on sentiment among investors, who pushed bond yields downwards and the stock market higher. Data shows that the ten-year bond yields dropped to 4.03%, while the five-year fell to 3.5%.
American stocks jumped, with the Dow Jones and the S&P 500 soaring to a new record high.
This performance is because investors anticipate that the Federal Reserve will slash interest rates by 0.25% in its meeting this week. The bank is concerned about the labor market, which has remained under pressure in the past few months, with the economy losing jobs in June.
The AUD/USD pair also rose as talks between the US and China continued in Madrid. In a statement, Donald Trump noted that the talks were going on well and that he expects to speak to China's Xi Jinping on Friday. A deal between the two countries would benefit the Australian dollar because of the vast amount of goods between China and Australia.
EURUSD Chart by TradingView
The other important AUD/USD news will come out later this week when the Australian statistics agency publishes the latest employment numbers. Economists expect the data to show that the unemployment rate remained unchanged at 4.3% as the economy lost 10k jobs during the month.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money AUD/USD Technical Analysis
The daily timeframe chart shows that the AUD/USD exchange rate has been in a strong uptrend in the past few months, moving from a low of 0.5913 in April to a high of 0.6675, its highest level since October last year. It has moved above the important resistance level at 0.6625, its highest level on June 24.
The pair has jumped above the 50-day moving average and the top of the trading range of the Murrey Math Lines at 0.6652. Its oscillators like the Relative Strength Index (RSI) and the MACD have continued rising.
Therefore, the pair will likely continue rising as bulls target the strong pivot reverse point at 0.6715. A break above that level will point to more gains to 0.6800. On the other hand, a move below the support at 0.6625 will invalidate the bullish outlook.
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