Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6700.
- 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 0.6700.
The AUD/USD exchange rate has been in a strong uptrend in the past few weeks, moving from a low of 0.6420 on November 21 to the current 0.6622.
Australian Dollar Rallies Ahead of Fed Decision
The AUD/USD exchange rate has been in a strong bullish trend in the past few days as investors reacted to the recent Australian inflation report, which showed the prices remained at an elevated level.
The rally continued on Monday after China published strong numbers. Data showed that the country’s exports rose by 5.9% in November, higher than the median estimate of 3.8%. Its imports rose by 1.9%, leading to a trade surplus of over $1 trillion.
Top Forex Brokers
Chinese data are important to Australia because of the volume of trade that the two do. China buys most of Australia’s goods and its services.
The next important catalyst from Australia will be the upcoming Australian jobs numbers. Economists polled by Reuters expect the data to show that the economy added 20k jobs in November from 42.2k in October last year. The unemployment rate is expected to come in at 4.4% from the previous 4.3%, while the participation rate remained at 4.7%.
The other key catalysts for the AUD/USD pair is the upcoming Federal Reserve interest rate decision. Economists expect the bank to cut interest rates by 0.25% in this meeting, leading to a divergence with the RBA, which may hike rates to contain the rising inflation.
AUD/USD Technical Analysis
The daily timeframe chart shows that the AUD/USD exchange rate has rebounded in the past few weeks, moving from a low of 0.6420 in November to the current 0.6625.
It has formed a double-bottom pattern, a popular reversal sign in technical analysis. Also, the pair has moved above the 50-day and 100-day Exponential Moving Averages and the Supertrend indicators.
It has also retested the neckline of the double-top pattern at 0.6617. A break-and-retest is a common bullish continuation sign.
Therefore, the pair will likely continue rising as bulls target the next key level at 0.6700, its highest level in September. A move above that level will point to more gains, potentially to the resistance level at 0.6750.
Ready to trade our free Forex signals? Here are the best forex platforms in Australia to choose from.