The AUD/USD pair will probably proceed falling as dangers to the worldwide financial system stay elevated.
- Sell the AUD/USD pair and set a take-profit at 0.6300.
- Add a stop-loss at 0.6500.
- Timeline: 1-2 days.
- Set a buy-stop at 0.6470 and a take-profit at 0.6600.
- Add a stop-loss at 0.6350.
The AUD/USD value continued its downward development because the relentless sell-off gathered momentum. It crashed to a low of 0.6447, which was the bottom level since May 1 of 2020. The pair has crashed by greater than 11% this yr.
US greenback index surges
The AUD/USD value continued falling because the US greenback index continued its bullish development. The index rose to $114 for the primary time in additional than twenty years because the USD soared in opposition to most currencies. This surge occurred because the carefully watched concern and greed index tumbled to 25 whereas the VIX index soared to $34.
The US greenback rally continued after hawkish statements by Federal Reserve officers. In an announcement through the weekend, Raphael Bostic mentioned that he supported a harder stance in opposition to inflation. The identical sentiment was repeated by Susan Collins, the brand new head of the Federal Reserve Bank of Boston. She argued that combating inflation would require gradual job development and extra tightening.
The pair will react to an announcement by Jerome Powell adopted by necessary financial information from the United States. Jerome Powell will probably reiterate what he mentioned final week when the financial institution determined to hike interest rates by 0.75%. It additionally hinted that it’ll hike by 0.75% in November and 0.50% in December.
The pair may also react to necessary financial information from the US. The Conference Board will publish the newest shopper confidence information. Economists anticipate the info to point out that shopper confidence jumped to 104.5 in August.
Meanwhile, the AUD/USD value additionally crashed after the OECD downgraded its outlook for the Australian financial system. The membership of rich nations estimates that the Australian financial system will develop by 2% from the earlier 2.5%. It expects that the financial system will gradual by 2.2% in 2023.
The four-hour chart reveals that the AUD/USD pair has been in a robust bearish development prior to now few weeks. It managed to maneuver under the important thing help stage at 0.6665, which was the bottom stage on September 16.
The pair has moved under the decrease facet of the Bollinger Bands whereas the MACD and the Relative Strength Index (RSI) have crashed. The pair will probably proceed falling as dangers to the worldwide financial system stay elevated.
If this occurs, the following key help stage to look at will probably be at 0.6300. The stop-loss for this commerce will probably be at 0.6550.