Daily Price Outlook
The AUD/USD pair continues to show bullish control as it approaches its weekly high near 0.6615 ahead of Friday’s European session. Despite concerns regarding the Reserve Bank of Australia’s policy reversal, the AUD/USD pair remains unaffected and benefits from overall weakness in the US dollar, along with positive domestic wage news.
The recent increase in the pair’s value may have been bolstered by the Senate’s approval of the US debt ceiling agreement. It’s worth noting that the Federal Reserve’s reduced hawkish stance and mixed US data have favored risk appetite and weighed on the US dollar, allowing the AUD/USD bulls to regain control after a two-day downtrend.
As a result, S&P 500 Futures show modest gains around 4,230, holding onto the previous day’s positive momentum. Meanwhile, the US 10-year Treasury bond yield, which experienced its first daily gain in six days, reflects the market’s concerns.
Looking ahead, RBA discussions and risk factors are likely to keep AUD/USD traders engaged before the crucial US jobs report and the final round of Fed negotiations before the pre-Federal Open Market Committee (FOMC) blackout period. It is also important to monitor the US Senate’s vote on the debt ceiling bill.
Forecasts suggest a decline in nonfarm payrolls (NFP) to 190K from the previous figure of 253K and an increase in the unemployment rate from 3.4% to 3.5%.
In terms of price analysis, the AUD/USD pair saw gains midweek, with a continuation of the upward movement during Thursday’s New York session as the US dollar weakened. Positive industrial data from China and expectations of a delayed interest rate hike by the Federal Reserve have boosted the Australian dollar, allowing it to recover from last month’s 1.7% loss.
According to a recent Reuters poll, the RBA is expected to maintain its key interest rate at 3.85% in June, despite inflation rising significantly beyond the target range.
AUD/USD Price Chart – Source: Tradingview
AUD/USD – Technical Outlook
The AUD/USD pair has seen a bullish surge, surpassing the important resistance level at 0.6585. On the four-hour chart, a bullish engulfing candlestick pattern has emerged, indicating strong momentum and positive sentiment towards the AUD/USD price.
Currently trading around 0.6612, the pair is likely to continue its upward trajectory towards levels such as 0.6640 or 0.6675. On the downside, immediate support is expected at 0.6585, followed by potential support at 0.6550 or 0.6500.
Technical indicators such as the 50-day exponential moving average, relative strength index (RSI), and moving average convergence divergence (MACD) suggest a balanced outlook for the currency pair. Therefore, it is crucial to monitor the 0.6585 level, as a successful breakout above it could lead to further upward momentum.
Furthermore, it is important to pay attention to upcoming US employment data, specifically the nonfarm payrolls (NFP) and unemployment rate, as these releases could have an impact on future price movements.
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