Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6200.
- Add a stop-loss at 0.6350.
- Timeline: 1-2 days.
Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6350.
- Add a stop-loss at 0.6200.
The AUD/USD exchange rate has held steady this week ahead of the upcoming US GDP, PCE data, and the Reserve Bank of Australia (RBA) interest rate decision. The pair was trading at 0.6285 on Thursday, down by 1.6% from its highest point this month.
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US economic data and RBA decision ahead
The AUD/USD pair remained in a tight range after Donald Trump unveiled import tariffs. In a statement, he warned that he would apply more tariffs on vehicle imports as he tries to boost local industries.
The statement came ahead of Trump’s Liberation Day on April 2, when the US will impose reciprocal tariffs on imports. Analysts warn that these tariffs will lead to higher inflation in the longer term.
The most recent data showed that the headline Consumer Price Index (CPI) retreated from 3.0% in January to 2.8% in February. Core inflation dropped from 3.3% in January to 3.1%. As such, analysts worry that tariffs will boost prices in the long term.
The next key inflation data to watch will come out on Friday when the US publishes the latest personal consumption expenditure (PCE) data. Economists expect the data to reveal that the headline PCE dropped from 2.5% in January to 2.3% in February, while the core figure fell from 2.6% to 2.5%.
The other data that may move the AUD/USD pair will be the upcoming US GDP data. Economists expect the numbers to reveal that the economy expanded by 2.3% in Q4 after growing by 3.1% a quarter earlier.
The AUD/USD pair will also react to next week’s Reserve Bank of Australia (RBA) decision. Economists expect the bank to slash interest rates by 0.25% now that the economy is slowing.
AUD/USD technical analysis
The AUD/USD exchange rate has retreated in the past few days. It moved from this month’s high of 0.6400 to 0.6285.
The pair has dropped below the important support level at 0.6350, its lowest swing in August last year. It also fell below the 50-day moving average, while the two lines of the MACD are moving below the zero line.
The pair has formed an ascending channel and is now near its lower side. Therefore, the pair will likely have a bearish breakout in the coming days. Such a drop could see it drop to the next psychological point at 0.6200.
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