Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6625.
- Add a stop-loss at 06500
- Timeline: 1-2 days.
Bearish view
- Sell the AUD/USD pair and set a rake-profit at 0.6500.
- Add a stop-loss at 0.6625.
The AUD/USD pair held steady after the Australian Bureau of Statistics (ABS) published the latest jobs numbers. It rose to 0.6542 on Thursday, up from this month’s low of 0.6420.
Australian Dollar Rally Continues
The AUD/USD exchange rate has been in an uptrend this week primarily because of the weak US dollar. The US Dollar Index (DXY) has pulled back to $97.85, its lowest level since July 28.
It has dropped due to the shift in sentiment among economists following the recent macroeconomic data on jobs and inflation.
Data released this week showed that the headline consumer price index (CPI) remained at 2.7%, while the core figure jumped to 3.1%.
Another report was released earlier this month showed that the labor market has deteriorated during the Donald Trump administration, primarily because of tariffs. The economy created 73,000 jobs in July, a figure that will likely be revised downwards.
The AUD/USD pair also reacted to this week’s Reserve Bank of Australia (RBA) interest rate decision. As was widely expected, the bank decided to cut interest rates by 0.25% for the third time this cycle.
The bank attributed the cut to the fact that the country’s consumer inflation continued falling in the second quarter, with the headline CPI falling closer to the target of 2.0%. The core consumer inflation, which excludes the volatile food and energy prices also continued falling.
The Australian Bureau of Statistics published the latest jobs numbers on Thursday, a day after it published the latest wage price index data. The report showed that the wage price index retreated slightly to 0.8% in the first quarter.
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Another report released on Thursday showed that the participation rate remained unchanged at 67.1%, while the jobless rate improved from 4.3% in July to 4.2%.
The next important catalyst for the AUD/USD exchange rate will be the upcoming US PPI amd jobless data. While important, these numbers will likely have a minimal impact on the US dollar.
AUD/USD Technical Analysis
The daily timeframe chart shows that the AUD/USD pair has been in an uptrend in the past few weeks as the US dollar retreated during Donald Trump's tariffs.
It has formed an ascending channel and moved above the 50-day moving average. It is also between the ascending channel, while the Relative Strength Index (RSI) has continued rising.
Therefore, the pair will likely continue rising as traders target the important resistance level at 0.6622. A drop below the lower side of the channel will point to more downside.
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