[ad_1]
The AUD/USD pair continued falling last week after the hawkish statement by Jerome Powell. It dropped to the key support at 0.6376, lower than last week’s high of 0.6490.
Forex Brokers We Recommend in Your Region
See full brokers list 
- Sell the AUD/USD pair and set a take-profit at 0.6360.
- Add a stop-loss at 0.6460.
- Timeline: 1-2 days.
- Set a buy-stop at 0.6435 and a take-profit at 0.6525.
- Add a stop-loss at 0.6350.
The AUD/USD pair sell-off continued its downward trend as the Australian dollar declined accelerated. It erased all gains made last week and dropped to a low of 0.6400, near its lowest level since November 2022.
The Australian dollar sell-off gained steam as the Chinese and American economic divergence continued. Recent economic numbers have shown that the Chinese economy is deflating as the slowdown continues.
China’s imports, including from Australia, have dropped sharply in the past few months. Additionally, industrial production and fixed asset investments have also slipped while the youth unemployment rate surged to a record high.
China’s slowdown has an impact on commodity prices. Recent data shows that prices of key Australian exports like coal and iron ore have dropped sharply in the past few months. As a result, many Australian companies, including BHP and Rio Tinto have recently published weak financial results and slashed their dividends.
China is a key trading partner for Australia since it buys most of its goods and services. As such, analysts expect that it will go through a slowdown in the second half of the year.
On the other hand, the US seems to be doing well, with the Atlanta Fed expecting a 6% growth in the third quarter. The economy is being supported by the construction sector as companies take advantage of Biden’s stimulus packages.
Therefore, analysts believe that the Federal Reserve will continue hiking interest rates in the coming meetings. In his statement at the Jackson Hole Symposium, Chair Jerome Powell warned that the bank could deliver another rate hike in its September meeting. That hike will push rates to the highest point in more than two decades.
There will be no economic data from Australia this week. Therefore, the AUD/USD pair will react to key numbers like the US consumer confidence, inflation, and job numbers.
The AUD/USD pair continued falling last week after the hawkish statement by Jerome Powell. It dropped to the key support at 0.6376, lower than last week’s high of 0.6490. It has dropped below the important support level at 0.6460, the lowest level on May 31st.
The Aussie has dropped below the 25-period and 50-period moving averages while the Relative Strength Index (RSI) has moved below the neutral point of 50. Therefore, the pair’s downward trend will continue as sellers target the next psychological level at 0.6363 (August 17th low).
Ready to trade our daily Forex signals? Here’s a list of some of the best Forex platforms Australia to check out.
[ad_2]