Bullish View
Buy the AUD/USD pair and add a take-profit at 0.7550.
Add a stop-loss at 0.7400.
Timeline: 1-2 days.
Bearish View
Set a sell-stop at 0.7435 and a take-profit at 0.7350.
Add a stop-loss at 0.7500.
The AUD/USD pair was little changed after the latest Federal Reserve decision and strong US employment data. It is trading at 0.7416, which is slightly higher than this week’s low of 0.7420.
Fed Decision
The Federal Reserve concluded its November meeting on Wednesday. In it, the bank did what most analysts were expecting. It decided to leave interest rates unchanged at the range of 0.0% and 0.25%. It hinted that interest rates will start rising in 2023.
The most important outcome of the Fed decision was that the members decided to start tapering their $120 billion per month asset purchase program. If the pace continues, it means that the bank will finish the purchases in June next year. Still, the bank said that it will possibly add or subtract to the figure depending on the market conditions.
On inflation, the bank said that the current period of high prices was transitory and that the situation will normalize in the coming year.
The decision came at a time when the US economy is showing mixed signs of recovery. For example, data released in October showed that the country’s economy grew by just 2% in the third quarter after it rose by 5.7% in the previous quarter. At the same time, the labour market has almost recovered while inflation is at elevated levels.
The RBA also decided to end its yield curve control program this week. Data published todat from Australia showed that exports and imports declined by 6% and 2% in September while retail sales fell by 4.4% in the third quarter.
The AUD/USD also moved little after the latest jobs data by ADP and strong US Services PMI data. Data by ADP showed that the American private sector added 571k jobs in October, an increase from the previous 523k. This increase was better than what analysts were expecting. At the same time, the ISM Non-Manufacturing PMI increased from 61.9 to 66.7.
AUD/USD Forecast
The AUD/USD tilted higher after the Fed decision. On the four-hour chart, the pair tested the key support at 0.7400, which was along the 38.2% Fibonacci retracement level. The current price is along thr 23.6% retracement level. At the same time, it is still below the 25-day and 50-day moving averages while the two lines of the MACD have done a bullish crossover. Therefore, the bullish trend will continue as long as the pair moves above the two moving averages.
