AUD/USD Signal 22/09: Rally Takes A Breather (Chart)

(MENAFN- Daily Forex) Bearish view

• Sell the AUD/USD pair and set a take-profit at 0.6500.
• Add a stop-loss at 0.6700.
• Timeline: 1-2 days.

Bullish view

• Buy the AUD/USD pair and set a take-profit at 0.6700.
• Add a stop-loss at 0.6500.

The AUD/USD exchange rate pulled back for three consecutive days as the recent rally took a breather after the Federal Reserve interest decision and after Australia published its August jobs report. It retreated to a low of 0.6592, down by 1.73% from its highest point this year Jobs Report and Federal Reserve Decision

The AUD/USD pair retreated after the Federal Reserve delivered its first interest rate cut of the year. Officials also sent a more dovish tone than expected, signaling that they would deliver two more cuts this year.

The Fed is concerned about the labor market, which has deteriorated in the past few months, with employers concerned about Donald Trump's tariffs. A report released earlier this month showed that the economy created just 22,000 jobs in August as the unemployment rate rose to 4.3%.

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The AUD/USD pair also pulled back after Australia published weak jobs numbers, raising the possibility that the Reserve Bank of Australia (RBA) will cut interest rates in the upcoming meeting. Still, most analysts expect the bank to pause rate cuts and continue with the gradual easing cycle.

This report showed that the economy lost 5,400 jobs in August, much lower than the expected addition of 21,500 jobs. The jobless rate remained at 4.2%, while the annual jobs growth slowed to 1.5% from 3.5% earlier this year.

Looking ahead, the next key catalyst for the AUD/USD exchange rate will be the upcoming speeches by top Fed officials like Tom Barkin, Beth Hammack, Stephen Miran, and Musalem. It will be the first time these officials have spoken since the last meeting.

The AUD/USD pair will also react to the upcoming flash manufacturing and services PMI data on Tuesday. These numbers will provide more information on the health of the Australian economy.

EURUSD Chart by TradingViewAUD/USD Technical Analysis

The daily timeframe chart shows that the AUD/USD exchange rate has pulled back in the past few days. It has moved from a high of 0.6706 last week to the current 0.6592, its lowest level since April.

The pair has dropped below the important support at 0.6620, the highest swing on July 24. Moving below that level confirmed a bearish breakout.

On the positive side, the pair remains above the 50-day Exponential Moving Average (EMA). That is a sign that bulls are still in control.

Therefore, the most likely scenario is where the pair continues falling briefly and then resumes the upside.

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