Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6560.
- Add a stop-loss at 0.6420.
- Timeline: 1-2 days
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6420.
- Add a stop-loss at 0.6560
The AUD/USD pair held firm after the Reserve Bank of Australia (RBA) published minutes of the last monetary policy meeting in which officials decided to slash interest rates for the third time of the cycle. It was trading at 0.6500 on Wednesday morning, up from the double-bottom point at 0.6420.
RBA Minutes and Lisa Cook Firing
The AUD/USD pair was flat despite some notable events from Australia and the United States. In Australia, the RBA released minutes that provided more details about the last meeting.
The minutes showed that officials were relieved that inflation was continuing its downward trend. The most recent data by the Australian Bureau of Statistics (ABS) showed that the headline and the weighted inflation figures dropped to its target rate. Officials expect inflation to be contained for the rest of the year.
The AUD/USD exchange rate also wavered after President Donald Trump announced that he was firing Lisa Cook, Federal Reserve Governor appointed by Joe Biden.
Cook, an economist and former Harvard University professor, maintained that she would not resign and that she would seek legal redress, which may move to the Supreme Court later this year.
The AUD/USD pair also reacted to the latest consumer confidence report by the Conference Board. In a report, the board said that the consumer confidence dropped from 98.3 in July to 97.4, a sign that consumers are worried about the state of the economy, especially the worsening labor market and the rising inflation.
Top Forex Brokers
The AUD/USD pair will likely react to a statement by Tom Barkin, a top Federal Reserve official. He will likely comment on these economic numbers and air his opinion on what the bank should do.
The other top data will come out on Thursday and Friday when the US releases the latest GDP and PCE inflation numbers.
AUD /USD Technical Analysis
The AUD/USD exchange rate has held up tight in the past few days as the market reflected on the statement by Jerome Powell. It formed a double-bottom pattern at 0.6422 and a neckline at 0.6566.
The pair’s MACD indicator has moved below the zero line, while the Supertrend indicator has turned red.
Therefore, the pair will likely remain in this range today since there will be no major economic data from the US and Australia on Wednesday.
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