Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6800.
- Add a stop-loss at 0.7000.
- Timeline:1-2 days.
Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.7000.
- Add a stop-loss at 0.6800.
The AUD/USD pair rose slightly as the recent sell-off stalled. After dropping to a low of 0.6830 this week, the pair rebounded to 0.6966. It remains much lower than the year-to-date high of 0.7185.
Hopes of the US-Iran War Ending
The AUD/USD pair rose after Donald Trump delivered a prime-time address on his war with Iran. In his statement, he reiterated his two- to three-week timeline for the war.
He also maintained that Iranian officials were asking for talks with the United States, a statement that Iran has rejected. Iran believes that it has time to keep fighting now 80% of its missiles in Israel are hitting their targets.
US and Israeli media have reported that the two countries were running out of the most advanced defense equipment. As such, there is a likelihood that the war will continue for longer than Trump predicts.
The end of the war would be bullish for the Australian dollar as it would push more investors away from the US dollar.
The AUD/USD pair will next react to the upcoming US non-farm payrolls (NFP) data, which will come out on Friday, when the US and most markets will be closed for Good Friday. Economists expect the upcoming report to show that the economy added over 50k jobs after shedding over 92k in February.
A report by ADP on Wednesday showed that the private sector created 62k jobs, lower than the 66k it created in the previous month. More data showed that the US retail sales grew by 3.7% in February before the war started.
AUD/USD Technical Analysis
The daily timeframe chart reveals that the AUD/USD pair has slumped from a high of 0.7185 in January to the current 0.6920.
It rose to a high of 0.6960 on Wednesday, an important level that coincided with the Woodie pivot point and the 50-day Exponential Moving Average (EMA).
The pair has formed a shooting star candlestick pattern, which is made up of a small body and a long upper shadow. It is a common bearish reversal sign in technical analysis.
The pair has remained below the Supertrend indicator, a sign that the bears are still in control.
Therefore, the pair will likely continue the downward trend as sellers target the key support level at 0.6830, its lowest level this week. A drop below that level will point to more downside, potentially to first support of the pivot point at 0.6720.