Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6800.
- Add a stop-loss at 0.6650.
- Timeline: 1-2 days.
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6650.
- Add a stop-loss at 0.6800.
The AUD/USD exchange rate held steady and formed a bullish engulfing pattern after China published its macroeconomic data on Monday. It rose to a high of 0.6715 and is slowly nearing the year-to-date high of 0.6786. It has jumped by 4.55% from its lowest level in November last year.
Australia Jobs Data and SCOTUS Ruling on Trump's Tariffs
The AUD/USD exchange rate held steady on Tuesday morning as traders continued to react to the latest macro data from China, Australia’s biggest trading partner.
The report showed that the economy slowed down in the fourth quarter as it expanded by 4.5% after growing by 4.8% in the third quarter. This slowdown happened as investments and the housing sectors continued to weaken.
However, the country managed to hit its annual target of 5%, helped by the surge in its trade surplus, which jumped to over $1.5 trillion last year. China's trade volume are important for Australia because of the vast amount of goods it buys from there.
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The next important catalyst for the AUD/USD exchange rate will be the upcoming jobs report, which will be published on Thursday this week. Economists polled by Reuters expect the data to show that the economy lost 30,000 jobs in January after losing 21.3k in the previous month.
They also expect the numbers to show that the unemployment rate rose to 4.4% in December from the previous 4.3%, while the participation rate rose to 66.8%. These numbers are important because the Reserve Bank of Australia (RBA) looks at them when making its interest rate decision.
Economists expect that the RBA will leave interest rates unchanged at 3.6% in its upcoming meeting on February 3rd because of the elevated inflation rate in the country.
The AUD/USD pair will also react to the upcoming Supreme Court decision on Donald Trump's tariffs, which is expected to come out later on Tuesday.
AUD/USD Technical Analysis
The daily timeframe chart shows that the AUD/USD exchange rate rose to 0.6715. It has remained above the 50-day Exponential Moving Average (EMA) and the Supertrend indicator.
It has also formed an ascending channel, a sign that the uptrend is continuing. It formed a bullish engulfing candlestick, which is made up of a bullish candle that fully covers a bearish candle. It is a common bullish reversal candle.
Therefore, the pair will likely continue rising as bulls target the next key resistance at 0.6765, its highest level this year. A move above that level will point to more gains, potentially to the psychological level at 0.6800.
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