Bullish view
Buy the AUD/USD pair and set a take-profit at 0.7250.
Add a stop-loss at 0.7050.
Timeline: 1-2 days.
Bearish view
Sell the AUD/USD pair and set a take-profit at 0.7050.
Add a stop-loss at 0.7250.
The AUD/USD exchange rate has been in an uptrend in the past few weeks and is now hovering at its highest point since June 2022. It has jumped by over 20% from its lowest level last year.
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Australian Dollar is Soaring Against the US Dollar
The AUD/USD pair has been in a strong uptrend, rising in the last four consecutive weeks, its longest streak since April last year. This surge has coincided with the broader weakness of the US dollar.
The pair rose after the US released an encouraging retail sales report. According to the Commerce Department, the country's retail sales rose by 4.0% YoY in March despite the rising inflation. It rose by 1.7% on a MoM basis from 0.7% in the previous month.
Meanwhile, Kevin Warsh, President Donald Trump’s nominee to replace Jerome Powell as the Federal Reserve Chair, was grilled in the Senate Banking Committee. In his statement, he maintained that he will maintain Fed independence and that he will not be a Trump puppet.
Trump has focused on the Fed since he became president, continuously pushing Powell to cut interest rates. He believes that rates are 3 percentage points above where they should be. As a result, he attempted to fire Governor Lisa Cook, and his Justice Department has sued Powell.
The AUD/USD pair will next react to the upcoming talks between the US and Iran as the ceasefire ends. It is still unclear whether the two sides will reach an agreement, as Iran believes that it has an upper hand.
A deal between the US and Iran would be bullish for the pair as it will lower demand for the safety of the US dollar.
AUD/USD Technical Analysis
The weekly timeframe chart shows that the AUD/USD pair has been in an uptrend since April last year to the current 0.7150. It has moved above the important support at 0.6950, its highest swing in September 2024.
The pair formed a mini golden cross pattern as the 50-week and 100-week moving averages crossed each other. Also, the Relative Strength Index (RSI) rose to 65, a sign that the bullish momentum is continuing.
Therefore, the pair will likely continue rising as bulls target the next important resistance level at 0.7250. However, there is a possibility that it will pull back as it has formed a double-top pattern.
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