AUD/USD Forex Signal: Extremely Bullish Above 0.7031

The outlook for the pair is currently bullish bias.

Bullish View

• Set a buy-stop at 0.7030 and a take-profit at 0.7100.
• Add a stop-loss at 0.6950.
• Timeline: 2 days.

Bearish View

• Set a sell-stop at 0.6950 and a take-profit at 0.6900.
• Add a stop-loss at 0.7050.

The AUD/USD pair rose slightly during the Australian session as investors reacted to the stronger US dollar and the latest Australian jobs data. The pair rose to a high of 0.700, which was close to this week’s high of 0.7031.

Australia’s Labor Market Tightening

The Australian job market is tightening at a slower pace than expected. According to the latest jobs report, the country’s unemployment rate declined from 4.0% in April to 3.9% in April, This was the lowest level on record. The same trend happened in the UK, where the unemployment rate crashed to the lowest point in nearly 50 years.

Meanwhile, the Australian economy added just 4,000 jobs in April after adding over 17.9k in March. This increase was significantly lower than the median estimate of 30k. The participation rate dropped from 66.4% to 66.3%. These numbers show that the country’s economy is doing well. However, the biggest challenge is that real incomes are falling. Data published on Wednesday showed that real incomes rose by just 0.7% in March as inflation jumped.

The AUD/USD pair’s price action happened as investors reflected on the hawkish statement by the Federal Reserve chair. Speaking at a WSJ event, Jerome Powell said that the bank will continue hiking interest rates in a bid to tame the soaring inflation.

The next key mover for the pair will be the Philadelphia Fed manufacturing index and the initial jobless claims numbers. The impact of these numbers on the pair will be much lower.

Perhaps, investors are still preparing for the upcoming Australian election that will happen during the weekend. Analysts expect that the outcome of these results will be close although labor remains in the lead. Still, Scott Morrison has managed to cover his gap recently.

AUD/USD Forecast

The AUD/USD pair formed a strong resistance level at 0.7031, which was the highest level on May 9th. The pair has moved slightly below the 50-day moving average. Further, the Relative Strength Index (RSI) and the money flow index (MFI) have diverged. The RSI pointing upwards and the MFI is facing downwards.

The outlook for the pair is currently bullish bias. A move above this week’s high of 0.7031 will signal that bulls have prevailed and will open the possibility of it rising to 0.7100. On the other hand, a move below 0.6950 will open the possibility of the pair moving below 0.6850.