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The pair will likely have a bearish breakout ahead of the upcoming US jobs data.
Bearish View
- Sell the AUD/USD pair and set a take-profit at 0.7125.
- Add a stop-loss at 0.7245.
- Timeline: 1-2 days.
Bullish View
- Set a buy-stop at 0.7220 and a take-profit at 0.7300.
- Add a stop-loss at 0.7150.
The AUD/USD pair remained in a tight range after the positive Australian economic numbers. The pair is trading at 0.7165, which is slightly below this week’s high of 0.88%. It has risen by more than 5% from its lowest level in May.
Australia Economic Recovery
The Australian economy is doing relatively well helped by the country’s reopening and the relatively high commodity prices.
According to the statistics agency, Australia’s economy expanded by 0.8% on a QoQ basis in the first quarter. This recovery was lower than the previous 3.6% and better than the median estimate of 0.5%.
As a result, the country’s economy rose by 3.3% on a year-on-year basis. Also, this growth was lower than the previous 4.4%.
This recovery was broad-based as the final consumption increased by 1.9% while capital expenditure rose by 0.7%.
Analysts expect that the recovery will continue, helped by the resurgent services sector. In the past few months, the number of tourist arrivals in the country has been in a strong growth.
Focus now shifts to the Reserve Bank of Australia (RBA), which will start its monthly meeting on Monday. With the election done, analysts expect that the bank will hike interest rates by another 0.25% as it continues its battle against inflation.
The AUD/USD is also reacting to the ongoing reopening in China. Authorities in Shanghai have decided to start unwinding the lockdowns that happened in the past few months. This unwinding is positive for Australia, which sells most of its products in China.
The pair will also react to the upcoming US non-farm payroll numbers. The data is expected to show that the economy added more than 300k jobs while wage growth continued by over 5.2%.
AUD/USD Forecast
The AUD/USD pair remained a tight ranget in the overnight session. It is trading at 0.7178, which was slightly below this week’s high of 0.7234. It is still consolidating between the ascending channel. Also, it is slightly above the 38.2% Fibonacci Retracement level while the MACD has moved above the neutral level.
Therefore, the pair will likely have a bearish breakout ahead of the upcoming US jobs data. This means that the pair will likely retest the support at 0.7100.
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