The pair may break-out higher as bulls target the next resistance at 0.7950.
Buy the AUD/USD and add a take-profit at 0.7950.
Add a stop loss at 0.7860.
Add a sell-stop at 0.7860 and a take-profit at 0.7800.
Set a stop-loss at 0.7900.
The AUD/USD erased some of the gains made on Friday as Australia started its vaccination roll-out. The pair is trading at 0.7875, which is slightly below last Friday’s high of 0.7908.
Australia Vaccine Rollout
The Australian government started a major vaccination drive yesterday, in a move that experts believe will stimulate the economy. The country has already received more than 140,000 doses of the Pfizer/BioNTech vaccine.
The vaccine rollout comes at a time when the number of daily coronavirus cases in the country has dropped to single digits. As such, analysts believe that the vaccines will help stabilize the services sector that has been hit hard by the virus.
On Friday, data by Markit revealed that the Manufacturing PMI was at 56.6 in February while the Service PMI was at 54.1. Still, with international travel still struggling, some sectors like hotels and tourism have continued to struggle.
This week, the AUD/USD will react to several economic releases from Australia like capital expenditure, Wage Price Index and private sector credit.
The pair will also react to the performance of major commodities. In the past few months, the pair has jumped, helped by a strong performance of commodities like iron ore and copper. In fact, some of the biggest miners in the country like BHP, Glencore, and Rio Tinto published relatively strong earnings last week.
AUD/USD traders will also be focusing on the upcoming $1.7 trillion stimulus package by the United States. This package will likely devalue the USD and boost commodities, which will be a good thing for the Aussie.
AUD/USD Technical Outlook
The AUD/USD completed the cup and handle pattern on the hourly chart on Friday. Since then, it has risen by almost 1% and is trading at a multi-year high. The price is still above the 25-period moving average. It is also forming what seems like a bullish flag pattern. Therefore, the pair may break-out higher as bulls target the next resistance at 0.7950.