Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6567.
- Add a stop-loss at 0.6400.
- Timeline: 1-2 days.
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6400.
- Add a stop-loss at 0.6567.
The AUD/USD exchange rate rebounded after forming a double-bottom pattern at 0.6420 last week. It jumped to a high of 0.6500 after Jerome Powell's speech in which he pointed to an interest rate cut later this year.
Jerome Powell Speech and RBA Minutes
The AUD/USD exchange rate rebounded after Jerome Powell's statement in which he pointed to potential interest rate cut, possibly in the September meeting.
The CME FedWatch tool places the odds of a rate cut in September at 75%, a major reversal from where it was last week. Similarly, most traders on Polymarket believe that the bank will cut rates by 25 basis points in the September meeting.
The Fed is increasingly concerned about the labor market, which has deteriorated in the past few months because of Donald Trump’s tariffs.
Recent data showed that the unemployment rate rose to 4.2% as hiring slowed to just 73,000. Most of the jobs created during the month were in the healthcare sector.
A Fed cut in September would be a major reversal as minutes of the last meeting showed. These minutes revealed that most Fed officials remained concerned about inflation, which has gone up gradually in the past few months.
The next important AUD/USD news will come out on Tuesday when the Reserve Bank of Australia (RBA) publishes minutes of the last meeting. The bank slashed interest rates by 0.25% as officials pointed to a slowing economy.
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These minutes come a day before the statistics agency publishes the monthly CPI indicator, which will provide more information in inflation trends in the country.
The AUD/USD pair will also react to important consumer confidence data from the United States. This is a crucial report that acts as a better indicator for the country’s economic growth since consumer spending is the biggest part of the economy.
AUD/USD Technical Analysis
The 12-hour chart shows that the AUD/USD exchange rate formed a double-bottom pattern at 0.6422 as the US dollar rallied before the Jackson Hole Symposium statement. A double-bottom is a popular bullish reversal sign and is characterized by two lower swings and a neckline.
The pair has moved above the lower side of the ascending channel. Also, it is attempting to move above the 50-period moving average. Therefore, it will likely continue rising as bulls target the neckline at 0.6567. A drop below the support at 0.6422 will invalidate the bullish outlook.
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