Bearish view
- Sell the AUD/USD pair and set a take-profit at 0.6945.
- Add a stop-loss at 0.7150.
- Timeline: 1-3 days.
Bullish view
- Buy the AUD/USD pair and set a take-profit at 0.7150.
- Add a stop-loss at 0.6945.
The AUD/USD pair was largely unchanged on Wednesday after Australia released a strong wage growth report. It was trading at 0.7075 on Wednesday, a few points below the year-to-date high of 0.7146.
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Australia Jobs Numbers
The AUD/USD exchange rate was largely unchanged after the Australian Bureau of Statistics (ABS) published the latest wage numbers, which are important to the Reserve Bank of Australia (RBA).
The report showed that wage growth continued in the fourth quarter. According to the ABS, the headline wage price index rose 0.8% from the third quarter. This growth led to an annual increase of 3.4%, higher than the expected 3.3%.
A higher wage growth report is usually a sign that inflation will remain steady in the coming months as consumers always spend more when their wages are growing.
The next important AUD/USD news will come out on Thursday when the ABS released the latest jobs report. Economists expect the data to show that the participation rate rose from 66.7% in December to 66.8% in January.
They also expect the unemployment rate moving from 4.1% to 4.2% and the employment change rising by 20,000 from the previous 65.2k. Australia’s jobs numbers have remained strong in the past few months.
The AUD/USD exchange rate will react to the upcoming Federal Reserve minutes, which will come out on Wednesday. These minutes will provide more information about the last meeting and what officials deliberated. The US will also release the latest trade data and manufacturing and industrial production reports.
AUD/USD Technical Analysis
The daily timeframe chart shows that the AUD/USD pair has remained unchanged in the past few days. It was trading at 0.7042, down slightly from the year-to-date high of 0.7150.
The pair has remained above the Supertrend indicator and the important resistance level at 0.6945, its highest level in September last year.
The Relative Strength Index (RSI) and the Percentage Price Oscillator (PPO) have formed a bearish divergence pattern. The two lines of the PPO have formed a bearish crossover, while the RSI has moved below the overbought level.
Therefore, the pair will likely continue falling as sellers target the key support level at 0.6945. A move above the key resistance level at 0.7150 will invalidate the bearish outlook.