2023-12-21 09:28:53
In case of an upward trend
- Take a buy trade for the AUD/USD currency pair and set the take profit level at 0.6900.
- Set the stop loss order at 0.6680.
- Timeline: 1-3 days.
In case of a downward trend
- Set a sell stop order at 0.6750 and a take profit order at 0.6650.
- Set the stop loss order at 0.6850.
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The Australian dollar continued to rise this week as hopes rose for further interest rate hikes by the Reserve Bank of Australia (RBA). The AUD/USD currency pair rose to a high of 0.6780, its highest point since July 27. It has risen more than 8% from its lowest level in November.
The AUD/USD currency pair continued to rise following the US published encouraging consumer confidence data. According to the Conference Board, consumer confidence in the country rose from 101.7 in November to 110.7 in November. This increase was higher than the average estimate of 103.8.
Consumer confidence is an important measure because it is a good sign of consumer spending, the largest portion of U.S. GDP. The US also posted strong numbers for existing home sales. Sales rose from 3.79 million in October to 3.82 million in November, higher than the expected 3.78 million.
The next key data to watch are the US GDP and manufacturing index data. The first estimate of the data showed that the economy expanded by 4.9% in the third quarter while the second estimate showed that it grew by 5.2%.
The statistics agency will also release personal consumption expenditure data for the third quarter. Economists expect the core PCE rate to reach 2.8% while the core PCE rate fell to 2.30%. PCE is the Fed’s preferred measure of inflation.
Other key data to watch are the Philadelphia Fed manufacturing index and consumer spending numbers. Economists expect the data to show a decline in the index by 3%.
Although these numbers are important, their impact on the US dollar will be relatively weak given that the Fed has already made its ruling. In this, the Fed left interest rates unchanged between 5.25% and 5.50% and indicated cuts in 2024.
The Australian dollar continued to rise as hopes for an interest rate hike by the Reserve Bank of Australia increased. On the daily chart, the pair reached its highest point since July 27. The pair is regarding to form a golden cross as the 50-day and 200-day moving averages cross each other.
Also, the Relative Strength Index (RSI) moved near the overbought point at 70. The MACD continued to rise. Therefore, the future trend of the pair is to the upside, and the next point to watch will be at 0.6900, which is its highest point on July 13 and June 19.
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