Bullish View
Buy the AUD/USD and set a take-profit at 0.7315.
Add a stop-loss at 0.7200.
Timeline: 1-2 days.
Bearish View
Set a sell-stop at 0.7235 and a take-profit at 0.7150.
Add a stop-loss at 0.7300.
The AUD/USD pair held steady ahead of a relatively busy week in the financial market. The pair rose to 0.7275, which was significantly higher than last week’s low of 0.7170.
RBA Interest Rate Decision
The AUD/USD will have several key events this week. The most important will happen on Tuesday when the Reserve Bank of Australia (RBA) concludes its two-day meeting. The central bank is expected to leave interest rates unchanged at 0.10%.
At the same time, the central bank will likely sound hawkish now that Australia has managed to contain the new wave of the pandemic. Still, the biggest concern for Australia is that China, its biggest market, has started slowing down in the past few months.
Industrial production has declined in the past few consecutive months. Data published by Caixin last week showed that the country’s manufacturing sector was starting to cool down.
In addition to the RBA decision, the AUD/USD will react to the latest Australian retail and trade numbers that will come out on Tuesday. The numbers are expected to show that retail sales remained under pressure in August as people in Victoria and New South Wales (NSW) remained in a lockdown.
Meanwhile, investors will keep watching the key developments in the United States where Congress failed to pass the bipartisan $1 trillion infrastructure package. This happened as moderate and progressive Democrats struggled to agree on the best way forward.
Other key issues that will move the AUD/USD this week is coal, whose price has risen substantially in the past few weeks. The price will likely continue rising as India’s reserves continues to shrink. The pair will also react to the Australian and US services PMI numbers scheduled for Wednesday and the non-farm payroll numbers scheduled for Friday.
AUD/USD Forecast
The AUD/USD pair held steady in the Asian session. It is trading at 0.7275, which is slightly above the 61.8% Fibonacci retracement level. It has also moved above the 25-day and 15-day moving averages (MA). It has also moved slightly above the important support at 0.7235, which was the neckline of the previous double-top pattern.
Therefore, the pair will likely keep rising as bulls target the next key resistance at 0.7315, which was the highest level on September 28. This view will be invalidated if the price drops below the support at 0.7230.
