Bullish view

• Set a buy-stop at 0.6520 and a take-profit at 0.6620.
• Add a stop-loss at 0.6425.
• Timeline: 1-2 days.

Bearish view

• Set a sell-stop at 0.6440 and a take-profit at 0.6380.
• Add a stop-loss at 0.6520.

The AUD/USD price moved sideways on Tuesday morning as investors assessed the happenings in China following the weak trade numbers. It was trading at 0.6475, slightly above Monday’s low of 0.6411. This price was about 4.88% above the lowest point in October.
 

RBA to continue hiking?

Analysts at Goldman Sachs believe that the Reserve Bank of Australia (RBA) will maintain a hawkish tone in the next few months. They expect that the bank will hike rates to 4.1% in the next six months as it continues fighting elevated inflation.

In a report, the analysts said that the RBA will try to avoid the risk of falling too far behind a synchronized global rate hike. As such, they expect that the bank will hike by 0.25% in each month to May next year. After that, the RBA will start easing in a bid to stimulate the economy.

Some analysts caution that further rate hikes will tip the Australian economy into a recession. In a note, Shane Oliver of AMP Capital said that 4.2% rate hikes will lead to a recession and push home prices down by about 30%.

The AUD/USD price also reacted to the happenings in China. On Monday, the country’s statistics agency said that exports declined by 0.3% in October. This decline was much lower than the median estimate of a 4.3% increase. It was also lower than the 5.7% growth it experienced in September. Imports also dropped by 0.7% in October.

Chinese data are important for the Australian economy and the Aussie because of the vast amount of goods that flow between the two countries.

The AUD/USD pair wavered as commodity prices erased most of the gains made on Friday. This happened after China rejected rumors that it will reconsider its Covid-zero strategy. There will be no major economic data from the US and Australia on Tuesday.
 

AUD/USD forecast

The AUD/USD price moved sideways in the overnight session. It rose and moved above the 50-day exponential moving average and the important support level at 0.6400. The Relative Strength Index (RSI) is nearing the overbought level. It also rose above the Ichimoku cloud.

Therefore, the pair will likely continue rising in the near term. More upside will only be confirmed if the pair manages to move above the important resistance at 0.6520, the highest point on September 27.

(Click on image to enlarge)

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