Bullish view
Buy the AUD/USD pair and set a take-profit at 0.7250.
Add a stop-loss at 0.7100.
Timeline: 1-2 days.
Bearish view
Sell the AUD/USD pair and set a take-profit at 0.7100.
Add a stop-loss at 0.7250.
The AUD/USD pair moved sideways after Australia released the first-quarter GDP report and as traders waited for the latest US jobs data. It was trading at 0.7173, inside the narrow range it has been in the past few days.
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Australia GDP and US Jobs Data
The AUD/USD pair has remained in a tight range as investors waited for more details on the ongoing US-Iran talks. The two sides have maintained their quagmire this week, with the deal that was announced a few weeks ago remaining elusive.
On Monday, Iran announced that it had suspended talks with the US because of Israel’s bombardment of Lebanon. Trump, who desperately needs a deal to end the war, immediately called Netanyahu and pushed him to end the war.
Israeli and Lebanese officials then held a meeting to discuss details of a ceasefire. Still, chances are that the attacks between the two countries will continue. This explains why crude oil prices have remained within a narrow range this week, ending the crash that has been going on in the past few days.
The AUD/USD pair also reacted to the latest Australian GDP data. This report showed that the economy did well before the war started and disrupted its performance. The economy grew by 2.7% in the first quarter from 2.6% in the previous one.
However, recent data showed that the country’s labor market weakened in April, with the unemployment rate rising and the participation rate falling. The economy also lost thousands of jobs during the month. While inflation softened in April, it was because of the government’s intervention measures.
The AUD/USD pair also held steady as traders waited for the upcoming ADP jobs report. This is a closely-watched report that estimates the number of private sector jobs that were created during the month.
AUD/USD Technical Analysis
The daily chart shows that the AUD/USD pair has done well in the past few days and was trading at 0.7176. It has remained above the ascending trendline that links the lowest swings in February, March, and May this year.
The pair remains above the Supertrend indicator, a sign that the bullish trend is still intact. Also, it formed an inverted head-and-shoulders pattern, a common bullish reversal sign.
Therefore, the pair will likely continue rising as bulls target the key resistance level at 0.7250. A drop below the ascending trendline will invalidate the bullish outlook.
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