Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6750.
- Add a stop-loss at 0.6550.
- Timeline: 1-2 days.
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6550.
- Add a stop-loss at 0.6750.
The AUD/USD exchange rate bounced back and moved closer to the year-to-date high after the Reerve Bank of Australia (RBA) delivered its interest rate decision. It rose to a high of 0.6665, much higher than this month’s low of 0.6440.
The pair rose after the minutes provided more information abut the last meeting in which officials left interest rates unchanged at 3.60% in its third consecutive hold. Officials justified the decision by noting that inflation was too tight, with the unemployment rate being low in historical standards.
They also noted that inflation was still too high, with Governor Michele Bullock warning that a rate hike was possible in 2026. Analyst believe that the bank may decide to hike as soon as in its February meeting, a decion that will depend on the upcoming inflation numbers.
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The AUD/USD exchange rate will next react to the upcoming US macro data, which will come out later today. One of these reports will be the US durable goods orders data, which is expected to come in at -1.5%, lower than the median estimate of 0.5%.
The US will also publish the latest durable goods orders and the GDP report. Economists expect the upcoming figures to show that the economy expanded 3.2% in the third quarter, lower than the 3.8% in the previous one.
The other key macro numbers to watch will be the consumer confidence and manufacturing and industrial production reports, which will shed more color on the performance of the economy.
AUD/USD Technical Analysis
The daily chart shows that the AUD/USD exchange rate rose to a high of 0.6560, much higher than this month’s low of 0.6440. It is nearing its highest leve this year of 0.6700, which it reached in September this year.
The pair has moved above the 50-day and 25-day Exponential Moving Averages (EMA). It also formed a double-bottom pattern with a neckline at 0.6705. A double-bottom is one of the most common bullish reversa signs in technical analysis.
The Relative Strength Index (RSI) and the Percentage Price Oscillator have continued rising in the past few days. Therefore, the most likely outlook is bullish as the divergence between the Fed and the RBA continues. If this happens, the pair may jump to 0.6800.
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