AUD/USD Signal 23/09: At Risk Of A Deep Drop To 0.700

(MENAFN- Daily Forex) Bearish view

Sell the AUD/USD pair and set a take-profit at 0.7000. Add a stop-loss at 0.7200. Timeline: 1-2 days.

Bullish view

Buy the AUD/USD pair and set a take-profit at 0.7200. Add a stop-loss at 0.7000.

The AUD/USD pair wavered today, September 3, and the next few days will be important as Australia publishes important macro data and the Reserve Bank of Australia (RBA) delivers its interest rate decision. It was trading at 0.7117, down from this month's high of 0.7238.

A report released by S&P Global showed that Australia's manufacturing and services PMIs remained above 50 this month, a sign that the economy continued doing well this month despite the rising inflation.

The next important catalyst for the AUD/USD pair will be the upcoming Australian jobs report. Economists expect the upcoming report to show that the economy created 20.9 jobs last month after losing 15.8k jobs last month. The unemployment rate is expected to remain at 4.5%.

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A strong jobs report will increase the possibility that the Reserve Bank of Australia (RBA) will hike interest rates by 0.25% in the coming meeting. It will be the fourth interest rate hike that the bank has made this year.

The AUD/USD pair will also react to the upcoming meeting between President Donald Trump and Xi Jinping, China's president. This meeting will provide more information about the relationship of the two biggest economies in the world.

Meanwhile, energy prices have continued falling in the past few days. Brent, the global benchmark, dropped to $98, while the West Texas Intermediate (WTI) fell to $89.86. Still, despite this, gasoline and diesel prices continued rising. The average gasoline price rose to $4.47, while diesel hit $6.52. Gasoline prices may hit the crucial resistance level of $5.

EURUSD Chart by TradingViewAUD/USD Technical Analysis

The daily chart shows that the AUD/USD pair has come under pressure in the past few days. It dropped from a high of 0.7238 earlier this month to the current 0.7115.

The pair has moved below the lower side of the rising wedge pattern. A wedge is a common bearish reversal pattern in technical analysis. It has also remained slightly above the 50-day moving average.

The pair has formed a bearish pennant pattern, which is made up of a vertical line and a symmetrical triangle. Therefore, the path of the least resistance for the pair is bearish, with the initial target to watch being at 0.700. This retreat will be confirmed if it moves below the support level at 0.7100.

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