Because of the shooting star pattern, the pair will likely continue falling as sellers target the next key support at 0.6800.
- Sell the AUD/USD pair and set a stop-loss at 0.6800.
- Add a stop-loss at 0.7000.
- Timeline: 2 days.
- Set a buy-stop at 0.6925 and a take-profit at 0.7000.
- Add a stop-loss at 0.6850
The AUD/USD price formed a shooting star pattern as the market braces for important events from the United States and Australia. The Australian dollar is trading at 0.6925, which is slightly below last week’s high of 0.6981.
Australia Inflation and Fed
The Australian dollar bounced back last week as the US dollar recoiled following weeks of an aggressive rally. The currency rose by over 4% from its lowest level this year.
This will be an important week for the AUD/USD price as Australia publishes the latest consumer inflation data on Wednesday and the US publishes important economic data.
The first important data to watch will be the latest US consumer confidence data by the Conference Board. Analysts expect the data to show that consumer confidence declined to 97.3 this month as inflation continued biting. It peaked at 128.9 in 2021. The US will also publish the latest new home sales data on Tuesday.
The next important data will come from Australia, where the statistics agency will publish the latest consumer inflation data for the second quarter. Analysts expect that inflation continued rising and hit a multi-decade high of 6.3%. On a QoQ basis, they expect that inflation dropped from 2.1% to 1.9%. In its most recent decision, the Reserve Bank of Australia (RBA) warned that inflation will keep rising in the near term.
The most important mover for the AUD/USD price will come on Wednesday when the FOMC concludes its meeting. Analysts expect that the bank will continue with rate hike cycle considering that US inflation rose to 9.4% in June. As such, the bank will likely hike by either 0.75% or 1%.
Finally, the US will release the important GDP number for the second quarter and the personal consumper expenditure (PCE) data.
The four-hour chart shows that the AUD/USD pair rose to the 50% Fibonacci Retracement level at 0.6975. It then formed a shooting star pattern that is usually a bearish sign.
The pair remains slightly above the 50-day moving average and slightly below the second resistance of the standard pivot point. The Relative Strength Index (RSI) has formed a bearish divergence pattern.
Therefore, because of the shooting star pattern, the pair will likely continue falling as sellers target the next key support at 0.6800.
Ready to trade our free trading signals? We’ve made a list of the best brokers to trade Forex worth using.