Bearish Pressure to Persist Ahead of F

The Fed believes that another rate hike is important because inflation remains above the target of 2.0%. 

• Sell the AUD/USD pair and set a take-profit at 0.6670.
• Add a stop-loss at 0.6800.
• Timeline: 1-2 days.

• Buy the AUD/USD pair and set a take-profit at 0.6800.
• Add a stop-loss at 0.6700.

The Australian dollar was flat on Tuesday morning as concerns about China’s slowdown continued. It also wavered as traders continued to focus on this week’s US consumer confidence data and Fed interest rate decision. It was trading at 0.6750, a few points above this month’s low of 0.6715.

The AUD/USD price wavered after China unveiled a slew of measures meant to boost the economy. Most of those measures focused on boosting domestic demand at a time when the economy is struggling. In a report, a state agency said that the country would step up policy adjustments.

Economic events in China are vital for Australia because it is the biggest importer of goods like coal and iron ore. Still, analysts believe that China’s economy will be weaker than expected this year. The average estimate is that the economy will grow by 5.1%.

The most important mover for the AUD/USD pair this week will be the upcoming Fed interest rate decision scheduled for Wednesday. Economists polled by Reuters and Bloomberg believe that the Fed will hike interest rates by 0.25% after it paused in June.

The Fed believes that another rate hike is important because inflation remains above the target of 2.0%. However, with inflation moving in the right direction, analysts expect this to be the last rate hike this year since America’s economy is slowing.

There will be no economic data from Australia on Wednesday. As such, traders will focus on the upcoming US housing and consumer confidence data. Economists expect the data to show that the housing price index (HPI) held steady in May as inventories remained low. They also believe that consumer confidence rose slightly in July.

The AUD/USD pair retreated to a low of 0.6714 on Monday and then pulled back slightly. This week’s low coincided with the ascending trendline shown in black. The 25-period and 50-period moving averages have made a bearish crossover pattern. At the same time, the MACD has moved below the neutral point,

The pair is also hovering slightly below the Woodie pivot point. Therefore, the pair will likely resume the downward trend as sellers target the first support of the pivot point at 0.6670.

Ready to trade our free Forex signals? Here are the best forex platform Australia to choose from.