Bullish outlook as pair reaches 0.6540 ahead of US inflation data. Focus on commodity prices and wage growth, with technical analysis suggesting a potential rise to 0.6620.

Bullish view

• Buy the AUD/USD pair and set a take-profit at 0.6620.
• Add a stop-loss at 0.6480.
• Timeline: 1-2 days.

Bearish view

• Set a sell-stop at 0.6520 and a take-profit at 0.6480.
• Add a stop-loss at 0.6620.

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The AUD/USD exchange rate drifted upwards on Tuesday as the focus shifted to the upcoming US inflation data. This rebound happened even as most currencies retreated against the greenback. It was trading at 0.6540, its highest point in more than a week.

US inflation data ahead

The Australian dollar rose slightly as traders waited for the closely watched US inflation numbers and as commodity prices retreated. Most commodities that Australia sells like iron ore and liquified natural gas (LNG) have pulled back in the past few weeks. This performance risks having an impact on the country’s economy.

The most important data to watch will be the upcoming US inflation report, which is one of the most crucial ones in the economic calendar. It is a vital report because it forms part of the Federal Reserve’s dual mandate of ensuring price stability and full employment.

The report will come a few weeks after the US published strong jobs numbers that revealed that the economy added over 350k jobs in January. Wage growth continued to accelerate, rising by 4.5% during the month.

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