Bullish View
Set a buy-stop at 0.7480 and a take-profit at 0.7545.
Add a stop-loss at 0.7440.
Timeline: 1-2 days.
Bearish View
Set a sell-stop at 0.7440 and a take-profit at 0.7350.
Set a stop-loss at 0.7500.
The AUD/USD pair tilted lower in early trading as investors waited for the upcoming US consumer confidence and Australian consumer inflation data. The pair is trading at 0.7467, which is about 1% below its highest level last week.
Australia Inflation and US Consumer Confidence Data
The AUD/USD pair has been under pressure in the past few straight days as investors continue reflecting on the recent minutes by the Reserve Bank of Australia (RBA). In the minutes, the RBA said that it will start hiking interest rates in 2024.
Many analysts believe that the bank will tighten earlier than that since the Australian economy is expected to bounce back earlier than expected. Besides, the price of most commodities has jumped and many service providers have started to reopen.
The numbers that will come out on Wednesday will provide more colour about inflation. The Australian Bureau of Statistics (ABS) will publish Q3’s consumer inflation data. Analysts expect the data to show that CPI remained intact at 0.8% in the third quarter.
On a year-on-year basis, these prices are expected to have dropped from 3.8% to 3.1%. Meanwhile, the trimmed and weighted mean CPI numbers are expected to have risen to 1.8% and 1.9%, respectively.
The AUD/USD pair will also react to America’s consumer confidence data scheduled for Tuesday. These numbers are expected to remain stubbornly low. Analysts expect the data to show that confidence declined to 108.8 in October. While the labour market has tightened and wages rose, consumers are scared about the rising consumer prices. Recent data showed that prices rose by 5.4% in September.
AUD/USD Forecast
On the four-hour chart, we see that the AUD/USD pair was in a bullish trend earlier this month as investors remained optimistic that the RBA will hike rates sooner than predicted. The pair rose from a low of 0.7170 on September 29th to 0.7545 on October 21st. This bullish momentum faded away last week and the pair is trading at 0.7467.
This price is slightly below the key support level at 0.7478, which was the highest level on 3rd September. It has also declined below the 25-day moving average. At the same time, this price action seems to be part of a break and retest pattern.
Therefore, there is a likelihood that the pair will likely rebound this week. If this happens, the pair will likely retest this month’s high of 0.7545.
