Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6700.
- Add a stop-loss at 0.6500.
- Timeline: 1-2 days.
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6500.
- Add a stop-loss at 0.6700.
The AUD/USD pair pulled back as the US dollar rose modestly after the recent inflation and jobs report. It retreated to a low of 0.6617, down slightly from this month's high of 0.6685.
RBA Interest Rate Minutes Ahead
The AUD/USD exchange rate pulled back as traders waited for the upcoming minutes of the Reserve Bank of Australia (RBA), which will come out on Tuesday.
These minutes will provide more information about the next meetings, with some analysts expecting that the bank will hike rates in the first quarter.
Odds of a hike have jumped in the past few weeks after the Australian Bureau of Statistics (ABS) published strong consumer inflation. The report showed that the headline, trimmed, and weighted consumer inflation numbers continued rising and moved further away from the bank’s target in October.
Another report released last week showed that Australia’s inflation expectations continued rising, with the average estimate being 4.7%. Therefore, analysts from top Australian banks like ANZ and CBA believe that the bank may hike rates in the first quarter.
On the other hand, the general view is that the Federal Reserve will continue cutting interest rates next year after the recent inflation and jobs data.
Top Forex Brokers
The data shows that the headline Consumer Price Index dropped to 2.6%, while the core CPI moved to 2.7%. These numbers will likely continue falling in the coming months as energy prices drop. Brent and WTI prices have all dropped in the past few weeks because of the ongoing supply and demand dynamics.
Meanwhile, natural gas prices have continued falling because of the relatively warmer weather.
Looking ahead, the next key catalysts for the pair will be the upcoming US GDP and consumer confidence report.
AUD/USD Technical Analysis
The AUD/USD exchange rate has rebounded in the past few days, moving from a low of 0.6440 on November 21 to a high of 0.6852. It has pulled back slightly to the current 0.6617.
On the positive side, the pair has moved above all moving averages and the Supertrend indicators, a sign that bulls are in control.
The Relative Strength Index (RSI) has moved from the overbought level at 70 to the current 55. Therefore, the pair will likely resume the bullish trend and possibly retest the key resistance at 0.6700.
Ready to trade our free Forex signals? Here are the best forex platforms in Australia to choose from.