Bullish View
Buy the AUD/USD pair and add a take-profit at 0.7273.
Add a stop-loss at 0.7100.
Timeline: 2 days.
Bearish View
Set a sell-stop at 0.7100 and a take-profit at 0.7000.
Add a stop-loss at 0.7200.
The AUD/USD pair rally fizzled out as focus shifted to the upcoming US inflation data scheduled for Friday. The pair is trading at 0.7165, which is slightly below this week’s high of 0.7180. It is still about 2.50% above the lowest level last week.
US Inflation Data Ahead
The AUD/USD turned higher this week after the Reserve Bank of Australia (RBA) concluded its two-day meeting on Tuesday. The meeting came at a time when Australia is still battling the Covid-19 pandemic.
In its statement, the bank sounded optimistic about the economy even as the number of cases rose. The main change in the meeting was that thev bank removed a guide to start hiking interest rates in about 2024. It replaced it with a statement that it will be patient on interest rate hikes. The bank will also continue with its quantitative easing policy until February.
The next key mover for the AUD/USD will be the latest US initial jobless claims scheduled for later today. Analysts expect the data to show that initial claims rose to about 214k last week. These numbers have fallen to where they were before Covid.
The data will come a day after the Bureau of Labor Statistics published the vacancies numbers. The US has more than 10 million vacancies while the number of resignations has been on an upward trend.
On Friday, the US will publish November’s inflation data. These numbers are expected to show that the country’s inflation rose from 6.2% in October to 6.7% in November. This will be the highest figure in more than three decades. Core CPI, which excludes the volatile food and energy prices is expected to rise to about 5%. Still, there are signs that the country’s inflation is peaking.
AUD/USD Forecast
The four-hour chart shows that the AUD/USD pair has been in a strong bullish trend in the past few days. It has risen by more than 2.5% even as the US dollar has gained slightly against other currencies. The pair has found resistance slightly below the 38.2% Fibonacci retracement level. It has also moved above the 25-day moving average and is between the middle and upper line of the Bollinger Bands.
Therefore, the pair will likely keep rising as bulls target the 50% retracement level at 0.7273. As such, any drop will be viewed as a buying opportunity.
