[ad_1]
The AUD/USD pair has been in a tight range in the past few weeks.
Forex Brokers We Recommend in Your Region
See full brokers list 
- Sell the AUD/USD pair and set a take-profit at 0.6420.
- Add a stop-loss at 0.6550.
- Timeline: 1-2 days.
- Set a buy-stop at 0.6480 and a take-profit at 0.6955.
- Add a stop-loss at 0.6400.
The Australian dollar bounced back against the US dollar as traders embraced a risk-on sentiment ahead of the Jackson Hole summit. The AUD/USD pair rose to 0.6480, the highest level since August 16th as the US dollar index (DXY) pulled back by 20 basis points.
A risk-on sentiment in the market spread in the overnight session as traders prepared for the upcoming meeting on Friday. In the United States, the yield of the 10-year government bonds dropped by 2% to 4.20% while the 30-year fell by 2.87% to 4.30%.
At the same time, the US dollar index retreated by 20 basis points to $103.27 while American stocks rebound gained steam. The Dow Jones index rose by 207 points to $34,500 while the Nasdaq 100 and S&P 500 rose by 231 and 50 points, respectively.
This risk-on mood happened after the US and Australia published mixed economic data. In Australia, the country’s statistics agency said that retail sales plunged by 3.5% in the second quarter after growing by 3.1% in the previous quarter.
Last week, a report by ABS showed that the country’s labor market is also softening. Further, a report by Judo Bank on Wednesday revealed that the services and manufacturing PMIs dropped to 46.7 and 49.4, respectively. As such, with China’s economy floundering, there is a likelihood that the RBA will pause its rate hikes.
The US also published weak manufacturing and services PMI figures. The data showed that the country’s manufacturing PMI dropped to 47 while the services PMI fell to 51. These numbers were weaker than expected.
The AUD/USD pair will next react to the upcoming US durable goods orders. Economists expect the data to show that durable goods dropped by 4% in July while core orders jumped by 0.2%.
The AUD/USD pair has been in a tight range in the past few weeks. It was trading at 0.6480, higher than this month’s low of 0.6364. The pair has moved slightly above the 50-period moving average.
At the same time, the AUD/USD pair has formed an ascending channel shown in green. This channel can be said to be a bearish flag. Therefore, the pair will likely have a bearish breakout ahead of the coming Jackson Hole summit.
Ready to trade our free Forex signals? Here are the best forex platform Australia to choose from.
[ad_2]