AUD/USD Consolidates Above 0.6800 as RBA Minutes Awaited.
Fundamental Overview
As investors eagerly anticipate the release of the Reserve Bank of Australia (RBA) minutes and US retail sales figures, the AUD/USD currency pair continues to fluctuate above the key level of 0.6800. Investors are particularly interested in understanding the reasoning behind the RBA’s decision to maintain interest rates at the current level of 4.10%. While striving to surpass the horizontal resistance of around 0.6900, the AUD/USD pair has encountered selling pressure, causing a brief setback.
Sideways Movement Ahead of RBA Minutes
During the European session, the AUD/USD pair exhibited a back-and-forth movement, hovering above the crucial support level of 0.6800. Market participants are eagerly awaiting the release of the RBA minutes, scheduled for Tuesday at 01:30 GMT. The Australian currency has entered a sideways phase as investors seek insights into the factors that influenced the RBA’s decision to maintain interest rates at 4.10%.
Meanwhile, S&P500 futures have experienced losses in London, indicating a cautious approach among market players as companies commence reporting their second-quarter earnings. The decline in the US-500 stock basket futures reflects a sense of wariness prevailing among investors.
Focus on US Retail Sales Data
In addition to the RBA minutes, investors are closely monitoring the monthly Retail Sales data from the United States, set to be released on Tuesday. Following the sluggish performance of the US Consumer Price Index (CPI) and a stable job market, investors anticipate a 0.5% increase compared to the previous release of 0.3%. Notably, the US Dollar Index (DXY) has surpassed the psychological barrier level of 100.00.
Technical Analysis: AUD/USD Daily Chart
Technical Overview
- AUD/USD is currently trading within an upward channel.
- The currency pair is positioned above all Simple Moving Averages (SMA).
- The Relative Strength Index (RSI) indicates bullishness, while the Stochastic oscillator suggests a neutral trend.
- Resistance level: 0.6829
- Immediate support level: 0.6793
How to Trade AUD/USD
After a sudden decline, the AUD/USD price has retraced and resumed its upward movement, forming a double-bottom pattern. Currently, the price is approaching its support area, indicating the possibility of an upside move if it remains above this zone.
Trade Suggestion:
- Entry at 0.6848
- Take Profit at 0.6891
- Stop Loss at 0.6816
Conclusion
As investors eagerly anticipate the release of the RBA minutes and US retail sales data, the AUD/USD currency pair remains above the crucial level of 0.6800. Market participants are keen to gain insights into the RBA’s decision-making process, while also closely monitoring the performance of the US retail sector. Technical analysis indicates a potential upside move, with the AUD/USD pair trading within an upward channel. Traders may consider an entry point of 0.6848, with a take profit target at 0.6891 and a stop loss set at 0.6816.
FAQs
1. What are investors eagerly awaiting in the AUD/USD market?
Investors are eagerly awaiting the release of the RBA minutes and US retail sales figures.
2. What is the current interest rate maintained by the RBA?
The RBA has decided to hold interest rates at the current level of 4.10%.
3. What caused the AUD/USD pair to face selling pressure?
The AUD/USD pair encountered selling pressure while attempting to break through the horizontal resistance level around 0.6900.
4. What is the significance of the US monthly Retail Sales data?
The US monthly Retail Sales data is of great significance to investors, especially after the sluggish performance of the US Consumer Price Index (CPI) and the stability of the job market.
5. What technical analysis factors should be considered for AUD/USD?
Currently, AUD/USD is trading within an upward channel, positioned above all Simple Moving Averages (SMA). The Relative Strength Index (RSI) suggests bullishness, while the Stochastic oscillator indicates a neutral trend.
6. What is the suggested trade strategy for AUD/USD?
Entry: 0.6848, Take Profit: 0.6891, Stop Loss: 0.6816