Bullish view
- Set a buy-stop at 0.6896 and a take-profit at 0.7000.
- Add a stop-loss at 0.6800.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 0.6830 and a take-profit at 0.6750.
- Add a stop-loss at 0.7000.
The AUD/USD price popped after the latest American jobs data. It popped to a high of 0.6886, the highest point since January 4. It has risen by more than 11.5% from the lowest point in 2022. Investors are now focusing on the upcoming American inflation numbers.
Strong American Jobs Data
The Australian dollar rose sharply on Friday and Monday morning as the US dollar index reacted negatively to the latest American jobs data. The dollar index, which tracks the performance of the greenback against a basket of currencies, plunged by more than 1%.
According to the Bureau of Labor Statistics (BLS), the economy added over 223k jobs in December, higher than the median estimate of 200k. In the same period, the unemployment rate dropped from 3.7% in November to 3.5%. The economy added over 4 million jobs in 2022.
Economists believe that the labor market will continue easing in the coming months as risks of a recession rise. Wages have already started falling. Data by the BLS showed that wages rose by 4.7%, the first time it has been below 5% in months.
The AUD/USD pair rose as investors anticipated that the Federal Reserve will start moving slowly on its rate hikes. It hiked by 450 basis points in 2022 and hinted that it will continue doing so in the coming months.
The next key catalyst will be the upcoming statement by Jerome Powell that is scheduled for Tuesday. It will be the first statement by the Fed chair this year. Analysts will be watching his statement for any clues of what the Fed will do. Minutes published last week showed that most Fed officials expect the bank to hike rates several times this year.
There will be no major data from Australia this week. Instead, the focus will be on America’s consumer and producer inflation data scheduled for Thursday. The bank earnings season will also have an impact on the US dollar.
AUD/USD Forecast
The AUD/USD price rose to a high of 0.6896, which was slightly below the important resistance point at 0.6896, the highest point in December. It moved above the 25-day and 50-day moving averages. On the 4H chart, the pair moved to the upper side of the Bollinger Bands. The Relative Strength Index (RSI) moved close to the overbought level.
A move above the important resistance point at 0.6896 will be a bullish sign. If this happens, the next key resistance level to watch will be at 0.7000. A drop below the support point to watch will be at 0.6800 will invalidate the bullish view.
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