Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6400.
- Add a stop-loss at 0.6600.
- Timeline: 1-2 days.
Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6600.
- Add a stop-loss at 0.6400.
The AUD/USD pair was flat on Wednesday morning after the Australian Bureau of Statistics (ABS) published the latest wage price index data. It was trading at 0.6517, inside a range it has been in the past few months.
Australia and US Jobs Data
The AUD/USD exchange remained in a narrow range after the ABS released the wage price index, which the Reserve Bank of Australia (RBA) watches closely.
The report showed that wages continued strengthening in the third quarter of this year, rising by 3.4%. These numbers may continue to fuel inflation higher in the coming months.
The report came a day after the RBA published minutes of the last monetary policy meeting. These minutes revealed that officials were cautious about inflation, which has held steady above the 2% target for years.
On the US side, the Federal Reserve will publish the latest mortgage lending data, which will provide information about the number of applicants and the average mortgage rate. Also, the Commerce Department will release the latest trade numbers. Economists expect the data to show that exports dropped from $280 billion to $278 billion, while imports fell from $348 billion to $341 billion.
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Most importantly, the Federal Reserve will publish minutes of the last meeting in which officials decided to cut interest rates by 0.25% to between 3.75% and 4%. These minutes will provide more information about what officials deliberated and provide hints on what to expect in the coming meetings.
The next important AUD/USD news will be the upcoming US jobs report that will come out on Thursday. These numbers will provide information on whether the economy created or lost jobs during the month. Lately, there are concerns that the labor market is softening as some companies have announced major layoff.
AUD/USD Technical Analysis
The AUD/USD exchange rate has moved sideways in the past few months. It was trading at 0.6515 on Wednesday, a price that coincides with the 50-day and 200-day Exponential Moving Averages (EMA).
It has also formed a head-and-shoulders pattern, which is a common bearish reversal sign in technical analysis. The Relative Strength Index (RSI) and the MACD have all remained unchanged in the past few days.
Therefore, the most likely AUD/USD forecast is neutral, with a bearish outlook. A bearish outlook will likely push it to the next key support at 0.6400. A move above the key resistance at 0.6600 will invalidate the bearish outlook.
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