[ad_1]
The AUD/USD pair dropped to a low of 0.6513 after the RBA interest rate decision last week. It then bounced back to a high of 0.6600 ahead of the NFP numbers.
Forex Brokers We Recommend in Your Region
See full brokers list
- Sell the AUD/USD pair and set a take-profit at 0.6515.
- Add a stop-loss at 0.6650.
- Timeline: 1-2 days.
- Set a buy-stop-at at 0.6612 and a take-profit at 0.6700.
- Add a stop-loss at 0.6550.
The AUD/USD exchange rate moved sideways on Monday morning as traders assessed the impact of last Friday’s US non-farm payrolls (NFP) data on the Federal Reserve. The pair was trading at 0.6570, a few points below Friday’s high of 0.6600.
The US labor market cooled a bit in July, according to data published by the Bureau of Labor Statistics (BLC). The report showed that the economy created 187k jobs in July after creating 209k jobs in the previous month. Data shows that the number of jobs added per month has been in a downward trend for a while.
Other parts of the jobs report were better than expected. For example, the unemployment rate dropped to 3.5% while hourly earnings growth came in at 4.4%. The wage growth figure is important because of its impact on the country’s inflation.
In line with these numbers, analysts believe that the Fed will likely maintain a hawkish tone in the coming months. The bank wants to see inflation fall to its 2% target. And for this to happen, wage growth should be slower than where it is today.
This view was confirmed by Michele Bowman, a member of the Federal Reserve Board. In a speech on Saturday, she said that more rate hikes will likely be needed since core inflation remains above the 2% target. She said:
“The recent lower inflation reading was positive, but I will be looking for consistent evidence that inflation is on a meaningful path down toward our 2% goal as I consider further rate increases.”
Therefore, the stance of the Federal Reserve is different than that of the Reserve Bank of Australia (RBA). In its meeting last week, the RBA decided to leave interest rates unchanged.
The AUD/USD pair dropped to a low of 0.6513 after the RBA interest rate decision last week. It then bounced back to a high of 0.6600 ahead of the NFP numbers. The pair has now moved slightly below the key resistance level at 0.6596, the lowest level on June 29th. This was an important level since it was the neckline of the double-top pattern.
The AUD/USD pair has dropped below the 25-period and 50-period moving averages. Therefore, the pair will likely continue falling as traders target the key support at 0.6513, the lowest level this month.
Ready to trade our daily Forex signals? Here’s a list of some of the best Forex platforms Australia to check out.
[ad_2]