Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6180.
- Add a stop-loss at 0.6325.
- Timeline: 1-2 days.
Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6325.
- Add a stop-loss at 0.6180.
The AUD/USD exchange rate was unchanged this week after the Reserve Bank of Australia (RBA) left interest rates unchanged on Tuesday. It was trading at 0.6270 on Wednesday, down by 2.25% from its highest point ths year.
US Liberation Day and NFP data ahead
The AUD/USD pair reacted mildly to the second RBA meeting of the year. In it, it left interest rates unchanged at 4.10%, with officials expressing concerns about inflation in the country.
Their concern is that, while inflation has moderated in the past few months, there was a risk that it will bounce back in lighter conditions.
The bank also noted that the labor market was still tight, which may lead to higher inflation over time. Recent data showed that the unemployment rate was at 4.1%, and analysts anticipate that it will fall below 4% in the coming months.
Governor Michelle Bullock noted that the RBA was concerned about the state of the world economy now that Donald Trump has triggered a trade war. He has placed large tariffs on top American allies like Canada and Mexico.
He will have his Liberation Day on Wednesday, when he will unveil reciprocal tariffs on most trading partners. It is unclear whether he will add tariffs on Australia because the US has a trade surplus with the country.
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However, the US will likely increase tariffs on China, a country that buys most Australian goods and services.
The next key catalyst for the AUD/USD pair will be the ADP jobs report. Economists expect the data to show that the private sector created 118k jobs in March after creating 77k a month earlier. These numbers came a few days before the US publishes its official nonfarm payrolls data.
AUD/USD technical analysis
The AUD/USD pair has remained in a tight range in the past few weeks even as concerns about Trump’s trade war have remained. It has moved slightly below the 50-day Weighted Moving Average (WMA).
The pair has also formed a symmetrical triangle pattern, with its two lines having a long way to go. Also, the Relative Strength Index (RSI) and the MACD have dropped and tilted downwards.
Therefore, the pair will likely remain in this range in the coming days. A break below the lower side of the triangle will point to more downside, with the next point to watch at 0.6180, its lowest point on February 28.
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