On Thursday, AUD/USD is building on yesterday's strong upward momentum. The pair broke through the resistance at 0.6400 and is trying to consolidate above it.
On the eve in the U.S. came out a labor market report from ADP, according to which employment in October increased from 89.0 thousand to 113.0 thousand with a forecast of 150 thousand.
Also yesterday the Fed met and Jerome Powell held a press conference. The Fed expectedly kept the rate at 5.5%. In the accompanying statement, the regulator noted the presence of increased risks of inflation growth with a stable labor market, which will allow the Central Bank to continue the cycle of monetary restriction, if necessary.
Pressure on the Australian dollar could be exerted by news from Australia and China. Thus, the index of business activity in the manufacturing sector of China in October fell from 50.6 to 49.5 pp, although analysts expected growth to 50.8 pp. In Australia in September, the number of building permits for new homes decreased by 4.6%. At the same time, the International Monetary Fund recommends the Reserve Bank of Australia to continue the cycle of rate hikes, motivating this opinion by the slow rate of inflation decline.
Technical analysis of AUD/USD for today
The Daily Bollinger Bands indicator is moderately rising. The MACD indicator from bottom to top breaks through the zero line and moves into the positive area, forming a buy signal. Stochastic oscillator from bottom to top is testing the 80% level and may soon enter the overbought area.
After consolidation of the pair above the level of 1.3450, we open long positions with take profit at 0.6500. Stop loss will be set at 0.6425.
When we break through the support at 0.6425, we wait for consolidation signals and then open sales in the direction of 0.6379. Stop-loss is placed at 0.6450.