AUD/USD: the asset is preparing for further growth 19 February 2021, 10:09

AUD/USD: the asset is preparing for further growth

19 February 2021, 10:09

Scenario
Timeframe	Weekly
Recommendation	BUY STOP
Entry Point	0.7825
Take Profit	0.7940
Stop Loss	0.7765
Key Levels	0.7590, 0.7629, 0.7786, 0.7900, 0.7940

Alternative scenario
Recommendation	SELL STOP
Entry Point	0.7720
Take Profit	0.7590
Stop Loss	0.7793
Key Levels	0.7590, 0.7629, 0.7786, 0.7900, 0.7940

Current trend

The Australian economy is recovering successfully after the COVID-19 pandemic. The minutes of the last meeting of the Reserve Bank, published on Tuesday, noted an improvement in the labor market. In January, 29.1K people got jobs, and the unemployment level fell to 6.4%, which was facilitated by health care policies and significant financial support. Economic recovery is expected to continue, with GDP rising by 3.5% in both 2021 and 2022. The regulator said it would not raise the interest rate until inflation consolidates within the target range of 2–3 %. This will require substantial wage increases driven by significant increases in employment. It is expected that these conditions will not be met until 2024.

The US dollar is falling due to ambiguous statistics released yesterday. On the one hand, the number of building permits for January amounted to 1.881 million against the forecast of 1.678 million. At the same time, initial jobless claims rose to 861K against the forecast of 765K, and the previous value was revised from 793K to 848K. The American currency is negatively affected by the constantly growing stock market, as well as inflation.

Support and resistance

The pair is growing from the support level of 0.7590. Now, the price is trying to break through the resistance level of 0.7786. After consolidation above it, the rate can grow to the level of 0.7940. The RSI indicator is in the neutral zone but directed upwards. The mid-term trend changed to an uptrend at the end of last week. The instrument consolidated above the target zone 0.7739–0.7723. The next growth target is the 0.7900–0.7883 zone.

Resistance levels: 0.7786, 0.7900, 0.7940.

Support levels: 0.7629, 0.7590.

Trading tips

Long positions may be opened above 0.7819 with the target at 0.7940 and stop loss 0.7765. Implementation period: 5–7 days.

Short positions may be opened below 0.7725 with the target at 0.7590 and stop loss 0.7793.