The pair may attempt to pull back as bulls target the upper side of the rectangle at 0.7815.
- Set a buy stop at 0.7750 and a take-profit at 0.7816.
- Add a stop-loss at 0.7700.
- Timeline: 1-2 days.
- Set a sell-stop at 0.7700 and a take-profit at 0.7650.
- Add a stop-loss at 0.7750.
The AUD/USD is little changed today as the market reflects on the overall stronger dollar after the recent strong data from the United States. It is trading at 0.7715, which is slightly higher than Friday’s low of 0.7693.
Australia PMI and RBA Decision
Data published early today revealed that the Australian manufacturing sector continued to do well in April as demand continued to rise. According to the Australia Industry Group (AIG), the Manufacturing Index rose from 59.9 in March to 61.7 in April. This was the highest figure since April 2018.
Further data by Markit revealed that the Manufacturing PMI rose from 56.8 in March to 59.7 in April. These numbers show that the Australian economy is in a strong path of recovery, helped by strong local and international demand. Manufacturers are also optimistic about the future and increasing their workforce.
The AUD/USD is also little changed as the market waits for key events and data set for Tuesday. The Australian Statistics Bureau (ABS) will publish the latest export, imports and trade surplus data from Australia. Exports are expected to be relatively strong, helped by the robust demand for commodities from China.
On Tuesday, the Reserve Bank of Australia (RBA) will also deliver its April interest rate decision. In general, analysts expect the bank to leave interest rate unchanged at 0.10%. However, there is a possibility that the bank will sound a bit hawkish considering that the economy is in recovery mode. Such a hawkish tone at a time when the Federal Reserve is a bit hawkish will see the Australian dollar rise.
Later today, the AUD/USD pair will react to the latest Australian PMI data. Data from Markit is expected to show that the PMI remained above 60 in April. Further data by the Institute of Supply Management (ISM) is also expected to show that the PMI rose from 64.7 to 65.0.
AUD/USD Technical Forecast
The AUD/USD pair declined to a low of 0.7700 ahead of the RBA interest rate decision. This price is more than 1.25% below its highest point in April this year. It is also slightly above the important support at 0.7700, which is along the lower side of the rectangle pattern. The 25-day and 15-day moving averages have also formed a bearish crossover pattern. Therefore, the pair may attempt to pull back as bulls target the upper side of the rectangle at 0.7815. However, a break below the support will be a sign that bears have prevailed.