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AUD/USD Forex Signal: Inverted H&S Pattern Points to More Upside – 13 September 2022

The Australian dollar made a modest recovery as focus remained on the ongoing US dollar retreat.


Bullish view

Buy the AUD/USD and set a take-profit at 0.7000.Add a stop-loss at 0.600.Timeline: 1-2 days.

Bearish view

Set a sell-stop at 0.6850 and a take-profit at 0.6750.Add a stop-loss at 0.7000.

The AUD/USD price tilted upwards on Tuesday morning as the US dollar sell-off continued. The pair rose to a high of 0.6900, which was the highest point since August 31st. This price action coincided with the overall decline of most developed country currencies.

US inflation data ahead

The Australian dollar made a modest recovery as focus remained on the ongoing US dollar retreat. After soaring to a two-decade high of $110.5 last week, the dollar index has dropped to about $108.30. This price action happened as investors focused on the upcoming US inflation data and the performance of treasuries.

The ten-year yield rose to a high of 3.35% while the 30-year yield jumped to 3.5%. The Bureau of Labor Statistics (BLS) will publish the latest US inflation data on Tuesday.

All indications are that US inflation pulled back for the second straight month in August. Precisely, analysts expect that the headline CPI fell from 0.0% in June to -0.1% in August as gas prices moved to about $3.75 per gallon. Other key contributors of inflation like clothing, used cars, and airfares have also retreated.

On a year-on-year basis, analysts expect that the country’s inflation dropped from 8.5% to 8.1%. Excluding the volatile food and energy prices, analysts expect that inflation rose from 5.9% to 6.1%. Still, the Federal Reserve has insisted that tightening will continue in the coming months.

There will be no economic data from Australia on Monday. The only important data to watch will be the latest jobs data scheduled for Thursday this week. Analysts expect that the Australian labor market did well as the unemployment rate dropped to 3.4%.

In its monetary policy meeting last week, the Reserve Bank of Australia hinted that the unemployment rate will remain in the current range for a while.

AUD/USD forecast

The AUD/USD pair has been in an upward trend in the past few days. It rose from a low of 0.6696 on September 5 to a high of 0.6900. The pair managed to move above the important resistance level at 0.6860, which was the lowest level on August 23rd.

It also moved above the 25-day moving average while the Relative Strength Index (RSI) has been in an upward trend. It has also formed an inverted head and shoulders pattern. Therefore, the pair will likely continue rising as bulls target the next key resistance level at 0.7000.

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