(MENAFN- Daily Forex) Bullish View

• Buy the AUD/USD pair and set a take-profit at 0.6700.
• Add a stop-loss at 0.6520.
• Timeline: 1-2 days.

Bearish View

• Sell the AUD/USD pair and set a take-profit at 0.6520.
• Add a stop-loss at 0.6700.

The AUD/USD pair was flat on Monday as focus remained on the ongoing US government shutdown and its impact on the economy and the rising possibility that the Federal Reserve will cut interest rates again. It was trading at 0.6600, up from last week's low of 6520 Government Shutdown and Impact on Fed

The AUD/USD pair remained on edge after the US published weak jobs and services numbers last week. A report by ADP showed that the economy lost 36,000 jobs last month.

Another report by the Institute of Supply Management (ISM) revealed that the services PMI slowed in September. Most importantly, business activity moved to the contraction zone during the month.

The jobs and services PMI numbers confirmed that the economy was slowing. They also came as the US went through a shutdown, with Donald Trump pledging mass layoffs, especially in Democratic states.

These numbers mean that the Federal Reserve will likely continue cutting interest rates in the coming meeting. If this happens, it will slas rates to between 3.75% and 4.0% as it seeks to support the economy.

The challenge, however, is that inflation is still at an elevated level, a situation that may worsen after Donald Trump unveiled his tariffs on furniture, pharmaceuticals, and heavy-duty trucks.

The Reserve Bank of Australia (RBA), on the other hand, has hinted that it will be slow to cutting interest rates. Officials, led by Michele Bullock, have opted for a more gradual cutting cycle this year/USD Technical Analysis

The daily timeframe chart shows that the AUD/USD exchange rate has held steady in the past few days, moving from a low of 0.6520 to 0.6600. It has moved above the 50-day Exponential Moving Average.

The pair has also formed a rising broadening wedge, commonly known as a megaphone. Also, the Relative Strength Index has moved above the neutral level.

Therefore, the pair will likely continue rising as bulls target the psychological point at 0.6700. A drop below the support at 0.6520, its lowest level on September 26 will invalidate the bullish forecast.

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