Bullish View
- Buy the AUD/USD pair and set a take-profit at 0.7200.
- Add a stop-loss at 0.7060.
- Timeline: 1-2 days.
Bearish View
- Set a sell-stop at 0.7100 and a take-profit at 0.7050.
- Add a stop-loss at 0.7150.
The AUD/USD price rally faded even after some hawkish comments by Philip Lowe, the Reserve Bank of Australia (RBA) governor. It is trading at 0.7130, which is about 2.35% above the lowest level in January.
Philip Lowe Hints About a Rate Hike
On Tuesday, the AUD/USD pair rallied after the RBA concluded its two-day meeting. The bank surprised many watchers after it decided to end its quantitative easing policy. It also reiterated that it will only hike interest rates once real inflation moves between 2% and 3%.
In a speech at the National Press Club of Australia, Philip Lowe said that rates could lift off later this year if the economy continued its recovery. This was the first time that the RBA chair acknowledged about such a scenario. In the past meetings, the RBA had hinted that the first hike will happen in 2024.
In the statement, the bank said that rate hikes will depend on how quickly the supply chain issues are resolved and how quickly the labour market strengthens. Data published recently showed that the unemployment rate has fallen while the closely watched wage price index crossed the 3% milestone.
The next major catalyst for the AUD/USD pair will be the latest jobs numbers from the US. On Wednesday, data by ADP revealed that the US private sector shed about 30k jobs in January. This happened even as the Great Resignation continued and the number of vacancies surged.
Later on Thursday, the Bureau of Labor Statistics will publish the latest initial jobless claims numbers. After weeks of rising, analysts expect that the claims declined ti 245k last week from the previous 260k.
On Friday, the US will publish the latest non-farm payrolls (NFP) data. Analysts expect that the unemployment rate declined again to about 3.8%.
AUD/USD Forecast
The AUD/USD pair has been in a bullish trend in the past few days. Along the way, the pair has managed to move slightly above the first resistance of the Woodie pivot point. It also rose above the 25-day moving average and the key support level at 0.7083. It has also just entered the Ichimoku cloud.
Therefore, the pair will likely keep rising as bulls target the next key resistance level at 0.7200. On the flip side, a drop below0.7083 will invalidate this view.
