Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6800.
- Add a stop-loss at 0.6675.
- Timeline: 1-22 days.
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6675.
- Add a stop-loss at 0.6800.
The AUD/USD pair soared to the highest level since October 2024 after Australia published the latest consumer inflation report. It rose to a high of 0.6765 and then pulled back to the current 0.6723 as traders refocus on the upcoming US jobs report.
US Jobs and Australian Jobs Data
The AUD/USD pair rose and then pared back some of these gains after Australia released the latest inflation report. Data released on Wednesday showed that the headline Consumer Price Index (CPI) dropped from 3.8% in October to 3.4% in November.
The trimmed mean CPI also moved from 3.3% to 3.2%, while the weighted mean inflation remained at 3.4%. These numbers mean that Australia’s inflation remains much higher than the RBA’s target of 2%.
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Therefore, the most likely scenario is where the RBA will maintain interest rates unchanged at 3.6%. Some analysts believe that the bank will hike rates as cutting would push prices higher.
The AUD/USD pair reacted to the latest ADP report showed that the economy added 41k jobs in December after shedding 29k jobs in the previous month.
Another jobs report showed that the number of job openings dropped to 7.146 million in November from the previous 7.44 million. This report, while important, is often seen as a lagging indicator.
The next important data to watch will be the latest initial and continuing jobless claims report. Also, the US will release the latest export and import data.
The most crucial data this week will be the official non-farm payrolls (NFP) data. Economists expect the data to show that the economy added 60k jobs in December, lower than the previous 65k.
AUD/USD Technical Analysis
The daily chart shows that the AUD/USD pair has been in an uptrend in the past few weeks. It has moved from a low of 0.6421 on November 21 to a high of 0.6764.
The pair moved above the key resistance level at 0.6705, its highest level in December last year. It has formed a cup-and-handle pattern, a common bullish continuation sign.
The pair has remained above the 50-day moving average and the Supertrend indicator. Therefore, the most likely forecast is where it continues rising as bulls target the psychological level at 0.6800. A drop below the support at 0.6685 will invalidate the bullish outlook.
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