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Preps for a Strong Bearish Breakout

The next key catalyst for the AUD/USD pair will be several important economic data from the United States.

  • Set a sell-stop at 0.6675 and a take-profit at 0.6600.
  • Add a stop-loss at 0.6800.
  • Timeline: 1-2 days.
  • Set a buy-stop at 0.6725 and a take-profit at 0.6850.
  • Add a stop-loss at 0.6600.

The Australian dollar has edged sideways in the past few weeks as traders focus on the next actions of the Federal Reserve and the Reserve Bank of Australia (RBA). The AUD/USD pair was trading at 0.6697, which was a few points below this month’s high of 0.6806.

The AUD/USD pair has been in a consolidation phase as traders assess the next actions by the Fed and the RBA. RBA minutes published last week showed that the committee believed that pausing rate hikes will be a good thing since it will give them time to assess the impact of the recent rate hikes. Therefore, analysts believe that the RBA will not hike interest rates any time soon.

Meanwhile, the Federal Reserve is sending mixed signals about interest rates. In a recent statement, Christopher Waller warned that the bank should continue hiking interest rates since inflation remains at an elevated level. Several other hawkish Federal Reserve members have also said that more hikes are needed now that the banking crisis is has abated.

The next key catalyst for the AUD/USD pair will be several important economic data from the United States. On Tuesday, the Conference Board will publish the latest consumer confidence data, which are an important part of the economy. Economists expect the data to show that the consumer confidence dropped from 104.20 to 104.0 in April.

The other important data to watch will be the latest new home sales data. Economists expect that new home sales dropped from 640k in February to 634k in March. Other crucial numbers will be core durable goods orders and the latest GDP data.

The 4H chart shows that the AUD/USD pair has been in a consolidation phase in the past few days. In this period, it has moved slightly below the 25-period moving average. It is now at the lower side of the ascending channel shown in red. The Relative Strength Index (RSI) has moved below the neutral point at 50.

Therefore, it seems like attempts by bulls to push the pair higher faced strong resistance at 0.6767 on April 20th. Therefore, there is a likelihood that the pair will continue rising as buyers target the key support at 0.6600.


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