Bearish view
Sell the AUD/USD pair and set a take-profit at 0.6750.
Add a stop-loss at 0.7050.
Timeline: 1-2 days.
Bullish view
Buy the AUD/USD pair and set a take-profit at 0.7050
Add a stop-loss at 0.6750.
The AUD/USD exchange rate has pulled back on Monday as the US dollar continued rising after the strong US jobs data released on Friday last week. It retreated below the important support level at 0.6900 as traders waited for more US macro data and watched the ongoing Iran war.
US Macro Data and Iran War
The Australian dollar retreated as the US dollar index jumped to $100 after the US released strong jobs data. A report by the Bureau of Labor Statistics showed that the economy created 178k jobs in March as the unemployment rate dropped slightly to 4.3%.
The report was much better than what most analysts were expecting. It was also a good reversal after the US lost over 133k jobs in the previous month.
Still, there is a risk that the labor market is still weak, with many large companies like Amazon, Oracle, Target, and Meta Platforms announcing large layoffs this year. This weakness will continue as companies leverage the concept of AI agents to replace workers.
The US will release important macro data this week, including the latest ISM non-manufacturing PMI report Monday and GDP and PCE on Friday. The PCE report is important as it is the Federal Reserve's favorite inflation gauge.
US inflation will likely continue rising in the coming months as energy, fertilizer, and transportation costs jump amid the ongoing war in Iran. Crude oil has remained comfortably above $110, with gasoline prices rising to above $4. The average diesel price has jumped to $6, meaning that prices of most items will eventually rise.
Traders will watch how the war evolves this week as Trump has threatened to bomb Iranian critical infrastructure if the country refuses to reopen the Strait of Hormuz.
AUD/USD Technical Analysis
The daily timeframe chart shows that the AUD/USD exchange rate has retreated from the year-to-date high of 0.7185 in January to the current 0.6900.
It is hovering slightly above the 23.6% Fibonacci Retracement level at 0.6980 and the Strong Pivot Reverse point of the Murrey Math Lines tool. It has also moved below the 50-day Weighted Moving Average (WMA).
Therefore, the pair will likely continue falling in the coming days, potentially to the 38.2% Fibonacci Retracement level at 0.6695. A drop below that level will point to more downside towards the 50% retracement level at 0.6543.