The pair will likely continue rising towards the upcoming RBA meeting scheduled for Tuesday next week.
Buy the AUD/USD pair and set a take-profit at 0.7600.Add a stop-loss at 0.7400.Timeline: 1-2 days.
Set a sell-stop at 0.7450 and a take-profit at 0.7350.Add a stop-loss at 0.7550.
The AUD/USD is loitering near its highest level since November last year after the strong Australian retail sales numbers and the budget. It is trading at 0.7500, where it has been in the past few days. This price is about 7.7% above the lowest level this year.
Australia Retail Sales
The AUD/USD held steady after the relatively strong retail sales numbers. According to the Australian Bureau of Statistics, the country’s retail sales rose by 1.8% in February. This figure was substantially better than the median estimate of 1.0%.
The strong retail sales numbers happened as Australia decided to end its Covid restrictions. It also allowed vaccinated foreigners to travel to the country for the first time since the Covid-19 pandemic started.
Other numbers from Australia have been a bit strong. The house price index has rallied because of the rising demand and limited supplies. At the same time, consumer inflation has remained at elevated levels in the past few months. This trend will likely continue after the latest budget that provided tax relief to Austalians.
Therefore, the performance of the Australian dollar is a reflection that most analysts expect that the Reserve Bank of Australia (RBA) will change its decision. Analysts at banks like ANZ and Westpac expect that the bank will start moving as early as in its meeting in May. Besides, its peers in western countries like the Federal Reserve and Bank of England have already started implementing rate hikes.
The AUD/USD also reacted mildly to the latest JOLTs and consumer confidence data from the United States. According to the Bureau of Labor Statistics, the country’s job openings declined from 11.28 million to 11.26 million in February. Meanwhile, data by Conference Board showed that consumer confidence rose from 105.7 to 107.2 in March.
The key data to watch today will be the final reading of US Q4 GDP data and the ADP nonfarm employment change number.
The AUD/USD pair has been in a strong upward trend in the past few weeks. On the daily chart, it is attempting to test the important resistance at 0.7557, which was the highest level on October 29th. It has also moved to the 50% Fibonacci retracement level while the MACD has moved above the neutral level.
Therefore, the pair will likely continue rising towards the upcoming RBA meeting scheduled for Tuesday next week. The key reference level to watch will be at 0.7600.