Bullish view
- Set a buy-stop at 0.6830 and a take-profit at 0.6900.
- Add a stop-loss at 0.6740.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 0.6755 and a take-profit at 0.6650.
- Add a stop-loss at 0.6850.
The AUD/USD price held steady as investors refocused on the upcoming interest rate decision by the Reserve Bank of Australia (RBA). It rose to a high of 0.6841, the highest point since September 13. The pair has jumped by over 10% from its lowest level this year.
RBA interest rate decision
The AUD/USD price has been in a strong bullish trend recently, helped by the relatively weak US dollar. After soaring to a high of $115 this year, the US dollar index has dropped to $104. This decline happened as investors reflected on the upcoming interest rate decision by the Federal Reserve.
The Fed has hiked interest rates by 400 basis points this year. Now, analysts expect that the Fed will slow the pace of interest rate hikes in its December meeting. Still, rates are expected to remain at an elevated level for years.
Recent economic numbers from the US have been encouraging. Inflation dropped from 8.3% in September to 7.7% in October. At the same time, jobs numbers published last Friday revealed that the economy added over 282k jobs in November while the unemployment rate remained at 3.7%.
The next key catalyst for the AUD/USD pair will be the upcoming interest rate decision by the Reserve Bank of Australia (RBA). Economists expect that the RBA will continue hiking rates in its final meeting of the year. Precisely, they expect that the bank will deliver its third straight 0.25% rate increase on Tuesday.
Recent data shows that the Australian economy is doing well. Data published last week showed that Australia’s headline inflation eased from 7.3% to 6.9% in October. This is a sign that the country’s inflation may have peaked. The trimmed CPI, which the RBA watches closely, showed that inflation dropped to 5.3%.
AUD/USD forecast
The AUD/USD pair remained at an elevated level on Monday morning. It was trading at 0.6797, which was slightly below last week’s high of 0.6842. On the 4H chart, the pair formed an ascending triangle pattern shown in red. It also rallied above the 25-day and 50-day moving averages while the MACD moved above the neutral level.
An ascending triangle pattern is usually a bullish sign. Therefore, the pair will likely continue rising as buyers target the key resistance level at 0.6900.
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