AUD/USD Forex Signal: Golden Cross Pattern Nears

Bullish view

  • Buy the AUD/USD pair and set a take-profit at 0.6770.
  • Add a stop-loss at 0.6600.
  • Timeline: 1-2 days.

Bearish view

  • Sell the AUD/USD pair and set a take-profit at 0.6600.
  • Add a stop-loss at 0.6770.

(Click on image to enlarge)

AUD/USD Signal Today - 20/05: Golden Cross Pattern (Chart)

The AUD/USD exchange rate continued its bull run last week as the US dollar index (DXY) plunged to its lowest level in more than a month. It soared to a high of 0.6715, much higher than this month’s low of 0.6360.
 

US dollar retreat continues

The Australian dollar rallied against the greenback after the weak US economic numbers. Data by the Commerce Department revealed that retail sales flattened in April as America’s growth engine slowed.

More numbers showed that the housing sector remained under pressure as the housing starts and building permits deteriorated. On the positive side, the headline and core consumer price index (CPI) dropped to 0.3%, its first drop in over six months.

Therefore, there are rising odds that the Federal Reserve will start cutting interest rates earlier than expected. Still, most Fed officials who talked last week, including Jerome Powell, hinted that the bank will continue being data-dependent.

The AUD/USD pair also rose after the encouraging Australian economic numbers. According to the Bureau of Statistics, the economy added over 38.5k jobs in April, reversing the previous drop of 5.9k. The job additions was higher than the median estimate of 22.4k.

Meanwhile, the participation rate rose to 66.7%, higher than the expected 66.6%. However, the jobless rate still rose to 4.1% during the month. These numbers mean that the Reserve Bank of Australia (RBA) could maintain higher interest rates for longer.

In its most recent economic release, the RBA hinted that rates will likely remain higher for longer, especially if inflation steadies. The RBA will provide more color about this when it publishes its minutes on Tuesday.

The other notable catalysts for the AUD/USD pair will be the upcoming statements by Fed officials like Loretta Mester and Philip Jefferson.
 

AUD/USD technical analysis

The Australian dollar continued rising last week after the crucial economic numbers from the two countries. On the daily chart, it has crossed the important resistance point at 0.6643, its highest swing since April 9th.

The pair jumped above the key resistance level at 0.6615, its first resistance level. Most importantly, it is about to form a golden cross, where the 50-day and 200-day Exponential Moving Averages (EMA) cross each other.

The Relative Strength Index (RSI) and the MACD indicators have continued rising. Therefore, the pair’s outlook is bullish, with the next point to watch being the first resistance of the Woodie pivot point at 0.6770.


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