[ad_1]
The main reason for the strong AUD/USD retreat was the relatively strong US dollar.
- Sell the AUD/USD pair and set a take-profit at 0.6575.
- Add a stop-loss at 0.6700.
- Timeline: 1-2 days.
- Set a buy-stop at 0.6680 and a take-profit at 0.6750.
- Add a stop-loss at 0.6600.
The Australian dollar retreated to the lowest point since May 3 as the US dollar index (DXY) pulled back. The AUD/USD exchange rate dropped to a low of 0.6640, lower than last week’s high of 0.6820.
The main reason for the strong AUD/USD retreat was the relatively strong US dollar. The dollar index, which tracks the greenback against a basket of currencies, rose to $102.70, the highest point since April 10th. It has jumped by almost 2% from the lowest level in April.
The main news to watch this week will be the debate on the American debt limit. Last week, Joe Biden met with Speaker Kevin McCarthy and failed to reach an agreement. A meeting scheduled on Friday was postponed to this week.
In a statement during the weekend, Lael Brainard, the head of the National Economic Council (NEC) said that talks between the two sides were constructive. The statement was a positive signal that the US will not default.
There will be no major economic data from the United States this week. The most important one will be the latest US retail sales numbers scheduled for Tuesday. Economists expect the data to show that retail sales rose by 0.7% in April. The US will also publish the latest building permits and housing starts data on Wednesday.
The other key catalysts for the AUD/USD pair will be speeches by key Fed officials like Raphael Bostic, John Williams, and Tom Barkin. These speeches will provide more information about what to expect from the Fed in the coming meetings.
The Australian dollar will also react to the latest Australian jobs data scheduled for Thursday this week and the RBA minutes set for Tuesday. The minutes will provide more details about the recent meeting.
The Australian dollar jumped to a high of 0.6815 last week. This was a few points above the 38.2% Fibonacci Retracement point on the four-hour chart. It then retreated sharply and moved below the 23.6% retracement point and the 25-day and 50-day exponential moving averages (EMA). The pair has also crashed below the key support point at 0.6793, the highest level on April 4 and April 14.
Therefore, after making a false breakout last week, the pair will likely continue falling as sellers target the next key support point at 0.6575.
Ready to trade our free Forex signals? Here are the best forex platform Australia to choose from.
[ad_2]