AUD/USD Signal 23/09: To Rebound Ahead Of Key Fedspeak

(MENAFN- Daily Forex) Bullish view

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

Bearish view

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

The AUD/USD exchange rate has pulled back in the past few days as the US dollar index rose after the FOMC decision. It pulled back from the year-to-date high of 0.6700 to 0.6600 as focus shifts to next week's Reserve Bank of Australia (RBA) rate decision.

The AUD/USD slipped after the Federal Reserve officials decided to slash interest rates by 0.25% in its meeting last week. Officials delivered a more dovish statement than expected, considering that the economy is facing a high inflation and low unemployment rate.

The AUD/USD pair will react to some important statements from Fed officials this week. Stephen Miran, the newest Fed official, noted that the bank should deliver more interest rate cuts to prevent a crisis in the labor market.

Beth Hammack, the head of the Cleveland Fed, noted that the bank should be cautious when cutting interest rates, noting that inflation was too high and the labor market was still strong, with the current unemployment rate being at 4.3%.

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More Fed officials will talk today and provide more hints on what to expect in the next meetings. The most important one will be Jerome Powell, the bank's chairman, who will likely reiterate his statement last week. In his press conference, he said that the labor market was not as strong as expected.

The other Fed officials who will talk today are Raphael Bostic and Michele Bowman, who, like Miran, has advocated for more interest rate cuts.

The pair will also react to the upcoming US GDP and personal consumption expenditure (PCE) report, which will come out later this week. While important, the PCE report will have a minimal impact on the pair as the Fed is now focusing on the labor market.

The pair will also react to next week's Reserve Bank of Australia, which may decide to cut interest rates after the weak jobs report last week.

EURUSD Chart by TradingViewAUD/USD Technical Analysis

The AUD/USD exchange rate has pulled back in the past few days, moving from a high of 0.6700 on September 17 to 0.6600 today. It has recently crossed the important support level at 0.6620, its highest level on July 24.

The pair has remained above the 50-day moving average and the Ichimoku cloud. It has also formed a small morning star candlestick pattern, pointing to more upside, potentially to the year-to-date high of 0.6700. A drop below the 50-day Exponential Moving Average at 0.6500 will invalidate the bullish outlook.

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