On April 27, 2023, the AUD/USD pair experienced selling pressure, declining to approximately 0.6611 during the Tokyo session. The Australian Dollar has since resumed its downward trend, while the US Dollar Index (DXY) is completing a minor corrective move, presenting additional obstacles for the Aussie asset.
Investors are anticipated to shift their funds to the US Dollar in response to the upcoming release of Q1 United States Gross Domestic Product (GDP) data, with a decline of 2.0% expected compared to the previous print of 2.6%. Firms have deferred their expansion plans to avoid higher interest obligations, causing a decline in GDP numbers.
The Australian Dollar experienced a significant sell-off on April 26, following the release of soft inflation data. The Reserve Bank of Australia (RBA) is likely to maintain its neutral policy stance due to the continuous decline in the Australian Consumer Price Index (CPI).
AUD/USD is currently on a bearish trajectory after the breakdown of an Inverted Flag chart pattern formed on the daily scale. The pattern is a trend continuation pattern in which a long consolidation is followed by a breakdown. The 20-period Exponential Moving Average (EMA) around 0.6680 is acting as a strong resistance for the Aussie bulls.
The Relative Strength Index (RSI) (14) has fallen into the bearish range of 20.00-40.00, indicating an activation of downside momentum. If the Aussie asset drops below the March 15 low of 0.6590, US Dollar bulls will likely exert their influence, exposing the asset to the March 08 low of 0.6568, followed by the November 02, 2022, high of 0.6500.
Alternatively, a decisive move above the round-level resistance of 0.6800 will drive the asset toward the February 23 high at 0.6872 and the February 20 high at 0.6920.
SELL Signal: The AUD/USD pair is currently experiencing a bearish trend, and the RBA’s decision to maintain a neutral policy stance may further dampen the Australian Dollar’s performance. Therefore, it may be advisable to consider selling the AUD/USD pair in the current market scenario.
TRADE IDEA DETAILS
CURRENCY PAIR: AUD/USD
CURRENT TREND: ↘️Bearish
TRADE SIGNAL: ↘️Sell
👍ENTRY PRICE: 0.6590
✅TAKE PROFIT: 0.6500
❌STOP LOSS: 0.6640