Bullish view
Buy the AUD/USD pair and set a take-profit at 0.7325.
Add a stop-loss at 0.7000.
Timeline: 1-2 days.
Bearish view
Sell the AUD/USD pair and set a take-profit at 0.7000.
Add a stop-loss at 0.7325.
The AUD/USD pair rose slightly after the Federal Reserve published minutes of the last meeting and after Australia released weak jobs report. It rose to 0.7152, a few points above this week’s low of 0.7080.
Top Regulated Brokers
Australia Jobs Report and FOMC Minutes
The AUD/USD pair rose slightly after the Federal Reserve published minutes of the last monetary policy meeting. Officials decided to leave interest rates unchanged between 3.50% and 3.75% in that meeting.
The minutes provided more information on what officials deliberated in that meeting. For example, some officials supported hiking interest rates if inflation continued rising.
The most recent data showed that the US inflation continued rising last month, moving to 3.8%. The headline Producer Price Index jumped to 6%, the highest level in years. As a result, there is a likelihood that the bank will hike interest rates later this year as inflation will continue rising.
The pair also wavered after President Donald Trump hinted that the US and Iran were close to a deal. This announcement pushed the US dollar lower, with oil prices falling below $100.
Still, there is a likelihood that the statement was meant to calm the markets, which Trump is actively participating in. The most recent disclosures showed that he executed over 3,700 trades in the first quarter.
The AUD/USD pair also reacted to the latest Australia jobs report, which showed that the unemployment rate rose to 4.5%. It lost 18.6k jobs the worst performance this year.
These numbers mean that the RBA may decide to pause it interest rate hikes. It has already hiked rates three times this year, making it the most hawkish bank in the developed world.
AUD/USD Technical Analysis
The daily chart shows that the AUD/USD pair bottomed at the Strong Pivot Reverse level of the Murrey Math Lines. It also found a floor at the 50-day moving average.
The pair has also formed a small harami candle, which is a common bullish reversal sign in technical analysis. Notably, the pair has formed an inverted head-and-shoulders pattern.
Therefore, the pair will likely have a strong bullish breakout in the near term. If this happens, the next key target to watch will be at 0.7324. This price is along the Ultimate Resistance of the Murrey Math Lines tool.