Bullish View
- Buy the AUD/USD pair and set a take-profit at 0.7230.
- Add a stop-loss at 0.7100.
- Timeline: 1-2 days.
Bearish View
- Set a sell-stop at 0.7150 and a take-profit at 0.7100.
- Add a stop-loss at 0.7200.
The AUD/USD pair continued its recovery pace on Monday as investors eye important economic data from Australia. It has risen to 0.7160, which is slightly above this month’s low of 0.6830.
Australian Economic Data
The Australian dollar reacted positively to this month’s election where Scott Morrison was replaced by Anthony Albanese. It has risen by more than 2% after the election. Albanese has pledged to raise wages and fight climate change.
The AUD/USD pair will be in the spotlight this week as the country’s statistics agency is expected to publish important economic data. On Tuesday, the agency will publish the latest building permits, business inventories, and credit numbers. Economists expect the data to show that building approvals increased by 2% in April while company gross operating profits rose by 4%.
The other important economic numbers will come out on Wednesday. Economists expect these numbers to reveal that the country’s economy did relatively well in Q1 supported by high commodity prices. Precisely, they expect that the economy expanded by 0.7% on a QoQ basis, translating to a year-on-year gain of 3.0%.
The final important Australian numbers will come out on Thursday when the statistics agency will release the latest retail sales and trade numbers. Preliminary data published a few days ago showed that the country’s retail sales did well in Australia.
The AUD/USD performance will be muted on Monday since US markets will be closed for the memorial weekend. As such, investors will be focusing on the upcoming US jobs data that will come out on Friday. The numbers are expected to show that the economy added over 300k jobs in May while the unemployment rate will keep falling.
AUD/USD Forecast
The AUD/USD pair has been in a strong upward trend lately as the US dollar index has retreated. On the 4H chart, the pair has managed to move above the 38.2% Fibonacci retracement level. It has also formed an ascending channel that is shown in black and moved above the 25-day moving average. At the same time, the pair’s Relative Strength Index (RSI) is approaching the overbought point at 70.
Therefore, the pair will likely keep rising as investors target the next key resistance point at 0.7235, which is along the upper side of the channel. A drop below the support at 0.7100 will invalidate the bullish view.
