Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6700.
- Add a stop-loss at 0.6600.
- Timeline: 1-2 days.
Bearish view
- Set a sell-stop at 0.6650 and a take-profit at 0.6600.
- Add a stop-loss at 0.6700.
The AUD/USD pair was flat on Tuesday morning as the market waited for the upcoming US consumer confidence data. It also moved sideways as the US dollar index (DXY) retreated from its highest points last week. It was trading at 0.6657, where it has been stuck at in the past few days.
US consumer confidence data
The AUD/USD pair has moved sideways in the past few days because of the overall convergence between the Fed and the Reserve Bank of Australia (RBA). The two banks have maintained a hawkish tone as the battle against inflation intensified.
In the US, the Fed has maintained that it will be data-dependence when determining when it will start cutting interest rates. The bank expects to deliver one rate cut this year if inflation continues falling. Economists believe that such a rate cut will happen in December after the US election concludes.
In Australia, the RBA left interest rates unchanged at 4.35% last week and expressed concerns about inflation. The central bank has hinted that it considered hiking interest rates in this meeting. Therefore, economists expect that the bank will consider hiking rates in the coming meeting.
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The next important data to watch will come from the United States, where the Conference Board will publish the latest consumer confidence data. Analysts expect the data to show that confidence dropped slightly in June as inflation concerns remained. A high consumer confidence report will be positive for the US dollar and vice versa.
The pair will also react to the upcoming US house price index (HPI) and statements by Michele Bowman and Lisa Cook. Housing prices have been relatively expensive in the past few months because of low inventories and high interest rates.
AUD/USD technical analysis
The AUD/USD pair has moved sideways in the past two months. It has remained inside the crucial support and resistance levels at 0.6580 and 0.6698. The pair has now moved slightly above the Woodie pivot point and the 50-period moving average.
Meanwhile, the RSI has moved slightly above the 50-period moving average while the histogram of the MACD has risen above the neutral point. Therefore, the pair will likely remain in this range on Tuesday. The key support and resistance levels to watch will be at 0.6600 and 0.6700.
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