Bullish View
Set a buy stop at 0.7630 and a take-profit at 0.7700.
Add a stop loss at 0.7550.
Timeline: 1-2 days.
Bearish View
Set a sell-stop at 0.7600.
Add a take-profit at 0.7550 and a stop-loss at 0.7650.
The AUD/USD held steady in early trading as the market focused on the rising bond yields in the United States and the upcoming interest rate decision by the Reserve Bank of Australia (RBA). It is trading at 0.7615, which is 1.17% above last month’s low of 0.7530.
Rising US Bond Yields
The US bond yields opened higher this week as investors started to price in a hawkish Federal Reserve in the next few months. This happened after the US Bureau of Labour Statistics published the latest US employment numbers.
In total, the American economy added more than 916,000 jobs in March as more states continued to reopen. This happened as the number of new coronavirus infections has dropped as the country has vaccinated more than 100 million people.
The positive US employment numbers came a day after Markit and the Institute of Supply Management (ISM) published the relatively strong Manufacturing PMI numbers from the US. Later today, the latter will publish the Non-Manufacturing PMI.
Therefore, these numbers point to a faster recovery of the American economy. Indeed, the recovery will be supercharged by the recent stimulus and the upcoming infrastructure spending. As a result, US bond yields have continued to rally, with the 10-year rising by 2.4% to 1.720% and the 30-year rising by 1.54% to 2.37%.
The AUD/USD is also holding steady ahead of the RBA interest rate decision set for tomorrow. The bank is expected to leave interest rates and other pandemic response tools unchanged even as the economy improves. Notably, the country’s real estate sector has continued to be vibrant, with house prices in most states surging.
AUD/USD Technical Analysis
The AUD/USD pair is trading at 0.7615. On the two-hour chart, it is between the important support and resistance level at 0.7562 and 0.7663, respectively. The price is also slightly above the 25-day and 15-day exponential moving averages (EMA).
It is also slightly above the standard pivot point. Therefore, in the near term, the pair may keep rising ahead of the RBA decision. That will see it soar to the important resistance at0.7650, which is the previous pivot point. However, a drop below 0.7600 will invalidate the bullish thesis.
