There will also be several important economic numbers this week.
- Buy the AUD/USD pair and set a take-profit at 0.6665.
- Add a stop-loss at 0.6580.
- Timeline: 1 day.
- Set a sell-stop at 0.6600 and a take-profit at 0.6500.
- Add a stop-loss at 0.6700.
The AUD/USD was a bit flat on Monday morning as investors prepared for a relatively busy week ahead. The pair was trading at 0.6620, ahead of the upcoming decisions by the Reserve Bank of Australia (RBA) and the Federal Reserve. There will also be important economic data from the US and Australia.
The biggest AUD/USD news this week will be the decisions by the Fed and RBA. The RBA, which started its two-day meeting on Monday, is expected to maintain its interest rates unchanged at 3.60% as it continues to assess the impact of its recent rate hikes. If this is correct, it will be the second straight meeting that the bank will leave its rates unchanged.
The next key decision will be from the Fed, which is battling the fragility of the banking sector and the fact that the American economy is slowing. Data published last Thursday showed that the country’s economy expanded at a slower pace than expected in the first quarter.
It is unclear what the Fed will do considering that the banking sector is still struggling after the collapse of First Republic Bank. Therefore, the bank could decide to leave interest rates unchanged as some officials supported in the last meeting. Alternatively, the bank could decide to hike interest rates by 0.25% and then point to a strategic pause. The Fed decision will be the most important catalyst for the AUD/USD pair.
There will also be several important economic numbers this week. The most important will be the latest American non-farm payrolls numbers, which will come on Friday. Economists expect that the economy added thousands of jobs as the job growth cooled.
The key Australian numbers this week will be the latest retail sales and PMI numbers scheduled for Wednesday.
The 1H chart shows that the AUD/USD pair made a bullish breakout last week after falling to a low of 0.6575. It has now retested the important resistance point at 0.6618, which was the lowest point on April 10 of this year. The pair has formed a small bullish flag pattern, which is usually a positive sign. It has also risen above the 25-period and 50-period moving averages.
Therefore, the pair will likely have a bullish breakout as buyers target the key resistance point at 0.6640, the highest point on April 28.
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