AUD/USD Forex Signal: Range-Bound with Bearish Bias - DailyForex.com
The pair will likely remain range-bound with a bearish bias.
Set a sell-stop at 0.7330 and a take profit at 0.7250.
Add a stop-loss at 0.7400.
Timeline: 1-2 days.
Set a buy-stop at 0.7360 and a take-profit at 0.7450.
Add a stop-loss at 0.7300.
The AUD/USD pair remained in a consolidation mode after the relatively weak Australian consumer sentiment data and as iron ore prices crashed. It is trading at 0.7345, where it has been in the past few days.
Iron Ore Prices
Australia is a leading producer of iron ore, the important component used in the manufacture of steel. The country mines and sells most of its iron ore to China, the biggest consumer. The price of iron ore declined by more than 5% in the overnight session after China announced new curbs on steel production.
A ton of iron ore with 63.5% ferrous content fell to $167 a ton, which was the lowest level in three months. Chinese imports of Australian iron ore have declined in the past four straight months. The prices of other commodities vital to the Australian economy have also retreated recently.
The AUD/USD pair also remained steady after the latest Australian sentiment data. According to Westpac Bank, the country’s consumer sentiment declined to -4.4% in August as the country continued struggling with the new wave of the pandemic. The sentiment was at 1.4% in July.
This trend was mostly because Australia has seen more COVID cases in the past few weeks, pushing Victoria and New South Wales to restart lockdowns. New South Wales confirmed new 344 locally acquired cases while Victoria reported about 20 new cases.
The next key driver for the AUD/USD pair will be the latest US inflation numbers that will come in the afternoon. The data is expected to show that the US Consumer Price Index (CPI) inched slightly lower from 5.4% to 5.3% while core CPI declined from 4.3% to 4.2%. Strong numbers will point to a hawkish Fed considering that the labour market is tightening.
AUD/USD Technical Analysis
The AUD/USD pair has been moving sideways in the past few days. The pair is trading at 0.7345, which is just a few pips below the 25-day moving average. The price is also between the horizontal channel whose support and resistance levels are at 0.7330 and 0.7411. The Stochastic oscillator has moved from the oversold level to the current range of 60. The pair will likely remain range-bound with a bearish bias. A drop below the support ay 0.7330 will open the possibility of it falling to below 0.7400.