In the case of an upward trend
- Take a buy trade for the AUD/USD currency pair and set the Take Profit order at 0.7200.
- Set the stop loss order at 0.7000.
- Schedule: one day.
In the event of a downward trend
The AUDUSD pair moved sideways as Wall Street investors started warning regarding the Chinese economy. They are also keeping an eye on the new Albanian policies and how they will affect the Australian economy. It is trading at 0.7082, slightly below this week’s high of 0.7128.
Chinese economy downturn
The ongoing lockdowns in China are having a huge impact on the country’s economy. In a statement on Tuesday, UBS analysts said the economy will grow by regarding 3% this year. This was a lower estimate than the previous 4.2%. They noted that persistent restrictions and lack of clarity on the exit strategy will hamper industrial production and customer spending.
In a separate statement, JP Morgan analysts said they expect the Chinese economy to grow 3.7%. Their previous estimate was for the economy to expand by 4.3%. Most of this slowdown will occur in the second quarter of this year.
These numbers are important for the AUD/USD currency pair due to the strong trade relations between Australia and China. China buys most of the goods from Australia.
Recently, the relationship between the two countries has been relatively volatile, with China blocking some goods from Australia. In a statement at the Quartet meeting, Anthony Albanese said he is ready to negotiate with China as long as the country is willing to drop trade embargoes and tariffs.
With no economic data out of Australia today, the focus will be on the upcoming Fed meeting minutes. The minutes will provide more color on the bank’s tightening process. However, since the bank has already indicated that it will be hawkish, there is a possibility that the pair will be muted. Another notable data to watch today will be US durable goods orders.
Forecast for the AUD/USD currency pair
The AUDUSD currency pair has been in a strong bullish trend in the past few days. The pair formed an uptrend channel shown in black. It also rose above the 25-day and 50-day moving averages and is located between 23.6% and 38.2% Fibonacci retracement.
Therefore, the pair is likely to maintain the bullish trend as the bulls target the psychological level of 0.7200. On the other hand, a drop below the support level at 0.7035 will nullify expectations for a bullish trend.
