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MENAFN- Daily Forex) Bullish view
Buy the AUD/USD pair and set a take-profit at 0.6800. Add a stop-loss at 0.6550. Timeline: 1-2 days.
Bearish view
Sell the AUD/USD pair and set a take-profit at 0.6550. Add a stop-loss at 0.6800.
The AUD/USD exchange rate continued its strong performance as the US dollar index plunged as traders waited for the upcoming Federal Reserve interest rate decision and the upcoming Australian jobs numbers. It has jumped to a high of 0.6685, its highest level since October last year Reserve Interest Rate Decision and Australia Jobs Data
The AUD/USD exchange rate has been in a strong uptrend in the past few weeks as the US dollar index plunged to the lowest level in weeks. It has moved from the year-to-date high of $110 in January to $96 today.
The pair has jumped as investors waited for the upcoming Federal Reserve interest rate decision, which will come out later today. Economists polled by Reuters expect the bank to cut interest rates by 0.25% in this meeting.
If this happens, it will be the first time that the bank slashes interest rates since last year. The 25 basis points cut will be much lower than the big cut that Donald Trump has called for.
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The Fed decision comes a day after the US published strong retail sales data. According to the Commerce Department, the country's retail sales were much better than what analysts were expecting.
The other important catalyst will be the upcoming US jobs numbers. Economists expect the data to show that the economy created 22k jobs in August after adding 24.5k jobs in July. These numbers will help the RBA when delivering its interest rate decision.
EURUSD Chart by TradingViewAUD/USD Technical Analysis
The daily chart shows that the AUD/USD exchange rate has been in a slow uptrend in the past few days, moving from a low of 0.6415 on August 22nd to the current 0.6685.
The pair blasted past the important resistance level at 0.6626, the highest swings on July 26. It has remained above the 50-day Exponential Moving Average, while the Relative Strength Index is nearing the overbought level.
The Average Directional Index has continued rising, reaching its highest level since June, a sign that it is gaining momentum.
Therefore, the pair will likely keep soaring as bulls target the important resistance level at 0.6800. A move below the important support at 0.6625 will invalidate the bullish outlook.
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