Bullish view
Buy the AUD/USD pair and set a take-profit at 0.7280.
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 0.7280.
The AUD/USD exchange rate continued its recent rally, reaching its highest level since May 29 this year. It has jumped to 0.7187, up by 4.54% from its lowest level in June this year. Focus will now be on the upcoming events from the United States, including macro data and the Jackson Hole Symposium.
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Australian Dollar Jumps Amid Key US Events
The AUD/USD pair continued rising, even as the US dollar bounced back. Data shows that the DXY Index jumped to 99.16, its highest level since August 19. This happened after the US published the latest PCE and GDP numbers. The report showed that the headline and core PCE report remained above 3% in July this year. Also, the economy continued growing in the second quarter, helped by the ongoing AI boom.
The next important AUD/USD news will be the upcoming US initial and continuing jobless claims numbers. Economists expect the report to show that the initial claims rose 208k last week, with continuing jobless claims moved to 1.79 million. These are important numbers that normally shed light on the state of the economy.
The most important catalyst will come out on Friday when the Federal Reserve Chair will talk at the Jackson Hole Symposium. The hope among investors is that he will provide a clear picture on what the Fed will do in the next meetings. That’s because he has been relatively muted on the forward guidance.
The statement will come a few days after the Reserve Bank of Australia (RBA) published minutes of the last meeting. These minutes showed that officials deliberated on the need for a pre-emptive hike in that meeting. A hike would bring the hikes this year to four.
AUD/USD Technical Analysis
The daily chart shows that the AUD/USD pair has been in a strong uptrend this month as traders focused on the potential RBA and Fed divergence. It has jumped to 0.7187, much higher than the 50-day Exponential Moving Average (EMA).
The two lines of the MACD indicator have crossed the zero line and are pointing upwards. Also, the relative Strength Index (RSI) has continued rising this month. Therefore, the pair will likely continue rising as bulls target the year-to-date high of 0.7280. A drop below the support level of 0.7100 will invalidate the bullish outlook.
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