Affiliate Disclosure
Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

AUD/USD Forex Signal: Aussie Rally Could Accelerate

Bullish view

  • Buy the AUD/USD pair and set a take-profit at 0.6800.
  • Add a stop-loss at 0.6700.
  • Timeline: 1-2 days.

Bearish view

  • Set a sell-stop at 0.6725 and a take-profit at 0.6650.
  • Add a stop-loss at 0.6800.

AUD/USD Signal Today - 08/07: Aussie Rally Ahead (Chart)

The Australian dollar continued its relentless bull run as the odds of a divergence between the Federal Reserve and the Reserve Bank of Australia (RBA) rose. The AUD/USD pair rose to 0.6734 on Monday, its highest level since January. It has risen by over 6% from its lowest swing in May.

RBA and Fed potential divergence

The AUD/USD pair continued rising after a series of high-frequency data confirmed that the US economy was softening. According to the Institute of Supply Management (ISM), the manufacturing and services PMIs dropped to the contraction zone in June.

Another report showed that the country’s labor market softened again in June. While the economy added over 206k jobs in June, the unemployment rate rose to 4.1% and is constantly moving in the wrong direction. Wage growth also softened slightly in June.

Therefore, with the recent data showing that inflation was moving downward, there is a likelihood that the Fed will cut interest rates as soon as in September. The key challenge for the Fed is that a rate cut would lead to accusations of political bias as the US heads to a general election.

Top Forex Brokers

    The Reserve Bank of Australia, on the other hand, has signaled that it will be forced to hike interest rates if inflation remains steady. If this happens, it will be the only global central bank hiking rates.

    The AUD/USD pair will react to several events this week. Jerome Powell will testify in Congress this week, where he will talk about the next actions. Like in his statement last week, Powell is expected to say that the bank will maintain rates higher for longer.

    The other important data will come out on Thursday when the US publishes the latest inflation data. These numbers will be good indicators of when the Fed will start cutting interest rates.

    AUD/USD technical analysis

    The AUD/USD exchange rate continued rising this week, reaching its highest point in months. It has crossed the important resistance point at 0.6712, its highest point in May this year.

    The pair has remained above the 50-day moving average and has formed an inverse head and shoulders pattern. Also, the Relative Strength Index (RSI) has moved slightly above the overbought level.

    Therefore, the pair will likely continue rising as buyers target the next psychological point at 0.6800.

    Ready to trade our free trading signals? We’ve made a list of the top forex brokers in Australia for you to check out. 

    Crispus Nyaga
    About 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.
     

    Most Visited Forex Broker Reviews