Bearish outlook
Sell the AUD/USD pair and set a take-profit at 0.6850.
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 0.6850.
The AUD/USD pair retreated to a low of 0.6896, down by over 4% from its highest level in September. Its retreat continued after Australia published a weak jobs report, lowering the possibility that the Reserve Bank of Australia (RBA) will hike interest rates again this year.
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RBA Interest Rate Hike Odds Fall
The AUD/USD pair has remained under pressure in the past few weeks, moving from a high of 0.7237 to a low of 0.6896. This selloff continued after the Australian Bureau of Statistics (ABS) published its jobs report last week.
The report showed that the country’s participation rate dropped from 67% in August to 66.8% in September. It was lower than the average estimate of 67%. This weakness happened as the country lost 39.3k jobs last month after adding 29.3k in August. It was also worse than the expected increase of 19.6k. These numbers suggested that the economy is not all that strong.
As a result, after hiking interest rates by 0.25% in the last meeting, analysts now expect the bank to leave rates unchanged in the foreseeable future. Inflation has remained above the 2% target in the past few days.
The AUD/USD pair will react to macro news as there are no major macro numbers from Australia and the US. One of these events will be the ongoing crude oil price surge, with Brent pushing further above the resistance level of $110, and the upward trend will continue. As a result, the average gasoline and diesel prices have jumped to $4.3 and $6.3.
AUD/USD Technical Analysis
The daily chart shows that the AUD/USD pair has slumped in the past few weeks, moving from a high of 0.7237 to a low of 0.6896. It slumped to the 38.20% Fibonacci Retracement level.
The pair has slumped below the 50-day Exponential Moving Average (EMA) and the Supertrend indicator. It is also hovering around the crucial support level that coincides with the lowest swing in June.
Therefore, the pair will likely continue falling, potentially to the psychological level of 0.6845, which coincides with the 50% Fibonacci Retracement level. This view will be confirmed if it drops below the support level of 0.6896.
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