[ad_1]
The pair will also react to the upcoming American producer price index (PPI) data.
Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.6800.
- Add a stop-loss at 0.6650.
- Timeline: 1-2 days.
Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6600.
- Add a stop-loss at 0.6750.
The AUD/USD price continued rising as the market waited for the upcoming meeting between Xi Jinping and Anthony Albanese. It rose to a high of 0.6722, the highest point since September this year. The Australian dollar has rallied by more than 8% in the past few weeks.
Australia and China relations
Australia and China have had a long business relationship. For decades, China has been the biggest buyer of Australia’s goods and services. Recently, however, this relationship has faded as a culture of mistrust has developed. As a result, China has banned some of Australia’s products, including iron ore.
Therefore, the AUD/USD price will likely react to the outcome of Xi Jinping’s and Anthony Albanese’s meeting at the G20 summit. It is still unclear what the two leaders will deliberate and the potential outcome of the meeting.
The pair will also react to the upcoming American producer price index (PPI) data. Economists polled by Reuters expect the data to show that the headline PPI dropped from 8.5% in September to 8.3% in October. Excluding the volatile food and energy prices, analysts expect that the core PPI declined from 7.2% to 7.0%.
These numbers will come a few days after the US published relatively weak consumer price index (CPI) data. According to the Bureau of Labor Statistics (BLS), the country’s consumer inflation pulled back from 8.3% in September to 7.7% in October.
Therefore, analysts believe that the Federal Reserve will join the Reserve Bank of Australia (RBA) in implementing smaller rate hikes in the coming meetings. The RBA has shifted to smaller 0.25% rate hikes in the past two meetings.
In a statement on Monday, Fed’s Lael Brainard said that smaller hikes by the Fed will now be needed. As a result, most analysts believe that the Fed will hike by 0.50% in December after increasing by 0.75% in the past four straight weeks.
AUD/USD forecast
The AUD/USD price has been in a strong bullish trend in the past few days. This rally gained steam after the pair moved above the important resistance level at 0.6520, the highest level since October 27. It has moved above the 25-day and 50-day moving averages while the Relative Stength Index moved to the overbought level.
The pair will likely continue rising as buyers target the key resistance point at 0.6800. A drop below the support at 0.6650 will invalidate the bullish view.
Ready to trade our free Forex signals? We’ve shortlisted the best Forex trading brokers in the industry for you.
[ad_2]
Source link
