Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6765.
- Add a stop-loss at 0.6600.
- Timeline: 1-2 days.
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6600.
- Add a stop-loss at 0.6665.
The AUD/USD exchange rate was flat on Wednesday as market participants waited for more macro data from the United States and the Supreme Court decision on Donald Trump's tariffs. It was trading at 0.6680, a few points below the highest point this year.
US Retail Sales Data and SCOTUS Decision
The AUD/USD pair was unchanged as traders reacted to the recent US data and their impact on the United States. A report released on Friday showed that the economy created 50k jobs in December, much lower than the median estimate of 70k.
Another report released on Tuesday showed that US inflation growth has faded, a sign that the impact of Donald Trump's tariffs has been relatively muted. The core Consumer Price Index dropped from 0.3% in November to 0.2% in December. It moved from 2.7% to 2.6% on an annual basis.
The next important data to watch will be the Producer Price Index (PPI), which will provide more information about inflation. Economists expect the report to show that the core PPI remained at 2.6% on an annualized basis.
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The other key report to watch will be US retail sales, which will provide more information about consumer spending. These numbers are expected to show that sales rose by over 3% YoY in December as the holiday shopping continued.
Traders will also focus on statements by some key Fed officials like Stephen Miran, Raphael Bostic, and Neel Kashkari. Also, the bank will publish its Beige Book.
Most importantly, the SCOTUS will announce its ruling on the legality of Donald Trump's tariffs. Polymarket data shows that odds are high that the court will rule against Donald Trump.
However, Trump will have more options to implement his tariffs in the coming months and achieve the same result. Data released on Tuesday showed the country's budget deficit narrowed to $1.67 trillion in 2025, the lowest level in three years.
AUD /USD Technical Analysis
The daily chart shows that the AUD/USD exchange rate was flat at 0.6680 on Wednesday, an important level since it was its highest level in September last year. It was the higher side of the cup-and-handle pattern.
The pair has remained above the 50-day and 100-day Exponential Moving Averages (EMA) and has formed an ascending channel. Also, the Supertrend indicator has remained in the green.
Therefore, the most likely scenario is where the AUD/USD pair continues rising, with the next key resistance level to watch being at 0.6765, its highest point this year. A move above that price will lead to more gains to 0.6800.
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