AUD/USD Forex Signal: Aussie Set For Brief Comeback – 18 July 2022
The pair will likely keep rising as bulls target the key resistance at 0.6850.
Buy the AUD/USD pair and set a take-profit at 0.6850.Add a stop-loss at 0.6750.Timeline: 1-2 days.
Set a sell-stop at 0.6761 and a take-profit at 0.6682.Add a stop-loss at 0.6825.
The AUD/USD price has crawled back in the past two days as the US dollar rally pauses. The pair rose to a high of 0.6800, which was the highest level on June 11th. It has risen by about 1.65% from its lowest level this year.
Australian Dollar Bounces Back
The AUD/USD price has risen in the past few days even as China continues locking down some important cities in its fight against inflation. Some of the important cities that have locked down are Macau, Jiamusi, Hefei, and Pingtan have announced some form of a lockdown.
These lockdowns came at a time when China’s caseloads remain substantially lower than other countries. Cities are, nonetheless, wary about more infections. China recorded about 432 new Covid-19 cases on Friday, the highest level in over 2 years.
Also, they have locked down at a time when there are concerns about China’s economic growth. Data published last week revealed that the Chinese economy slowed at the lowest pace since 2020 because of the ongoing recession. The economy expanded by 0.4% in Q2, sharply lower than the 4.8% it recorded in the previous quarter.
The AUD/USD pair also rose as investors priced in higher interest rates from both Australia and the US. The Reserve Bank of Australia (RBA) hiked interest rates by 0.50% earlier this month and hinted that more hikes were coming. The bank will publish its minutes on Tuesday.
Data published by the US signaled that the Fed will also hike by at least 0.75% in July. For example, the unemployment rate remained unchanged at 3.6% while the economy added more than 370k jobs. And last week, numbers revealed that the country’s inflation surged by 9.1% in July.
The four-hour chart shows that the AUD/USD pair formed dropped to a multi-year low of 0.6682 last week. It has now pulled back to the current 0.6800, which is an important psychological level. The price is also slightly above the important support level of 0.6761, which was the lowest point in July.
The pair has also moved above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) has pointed upwards. Therefore, the pair will likely keep rising as bulls target the key resistance at 0.6850. It will then resume the bearish trend.
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