AUD/USD Forex Signal: Extremely Bearish Below 0.7675

Crispus Nyaga

The pair will likely keep falling as bears target the next key support at 0.7646.

Bearish View

  • Set a sell-stop at 0.7675 and a take-profit at 0.7645.
  • Add a stop-loss at 0.7750.
  • Timeline: 1-2 days.

Bullish View

  • Set a buy-stop at 0.7715 and a take-profit at 0.7850.
  • Add a stop-loss at 0.7650.

The AUD/USD pair tilted upwards after the positive news from Victoria. The pair rose to 0.7692, which was higher than Wednesday’s low of 0.7675.

Victoria Lockdown Eased

The Australian dollar rose slightly after the Victorian government announced that it will start to ease the ongoing lockdown on Thursday. Residents will be allowed to travel more than 25 kilometers and remove their masks when having outdoor events. The number of people holding public gatherings will rise to 12 people while venues will be allowed to lower their patron caps. This is a positive thing for the country since it will lead to more business activity.

The AUD/USD will today react to the latest economic data from China. The country’s National Bureau of Statistics will publish the latest fixed asset investments, industrial production, retail sales, and unemployment rates. Economists expect the data to show that the fixed asset investment fell from 9.8% in April to 9.0% in May while fixed asset investments fell from 19.9% to 16.9%. These are important numbers, since China buys most of Australia’s goods.

The biggest catalyst for the pair will be numbers and events from the United States. The US will publish the closely-watched building permits and housing starts data. Economists expect the data to show that the number of building permits issued in May declined from 1.733 million to 1.730 million. They also see the number of housing starts rising from 1.569 million to 1.630 million as the sector continues doing well. Further data expected today are the Import and Export Price Index.

The AUD/USD will also react to the latest Fed interest rate decision. The bank is expected to leave its interest rate and quantitative easing policy unchanged and possibly change tone on its policy.

AUD/USD Analysis

The four-hour chart shows that the AUD/USD pair has risen slightly from its lowest level this week. It has moved slightly above the important level of 0.7692. It remains slightly below the 25-day and 50-day exponential moving averages (EMA). It is also below the descending blue trendline and has formed what looks like a head and shoulders pattern whose head is at 0.7890. Therefore, the pair will likely keep falling as bears target the next key support at 0.7646. However, a move above the resistance at 0.7720 will invalidate this trend.

AUD/USD

Crispus Nyaga
Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.

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