Technical analysis: If the AUD/USD breaks through 0.6625, the bullish outlook is extremely strong

On Tuesday (September 9), the Australian dollar/US dollar gradually climbed, although there were ups and downs during the period, the upward trend was more obvious. Prices accelerated upward in the afternoon, reaching a maximum of around 0.6619. As market participants awaited the upcoming US consumer inflation and employment data, the Australian dollar/US dollar exchange rate continued to recover. The dollar weakened before the non-farm payrolls data was revised, and the US job growth for the year ending in March is expected to be sharply revised down.

US employment and inflation data

The gains in the AUD/USD exchange rate were driven by investors' reaction to Friday's US non-farm payrolls (NFP) data, which showed that the number of US jobs added in August was much lower than expected, with only 22,000 added, below the market median expectation of 75,000.

The next report to focus on is the "revised U.S. employment data for the 12-month period ending in March." Analysts expect the Bureau of Labor Statistics revision to show that the number of new jobs created during this period was 800,000 less than previously reported; some analysts believe the margin could be closer to 1 million.

A large correction would confirm that the US labour market is less robust than previously thought, a development that could put pressure on the Federal Reserve to cut interest rates next week.

The main risk now is that the US could slip into "stagflation" - a period of slowing economic growth but high inflation. Data due on Wednesday are expected to show that the headline producer price index (PPI) in the United States will remain at 3.3%, while the core PPI, which excludes volatile items, will fall from 3.7% to 3.5%.

Another key factor affecting the AUD/USD exchange rate will be the US consumer price index (CPI) released on Thursday, which is expected to rise from 2.7% in July to 2.9% in August, and the core CPI from 3.1% to 3.2%.

Therefore, while the Federal Reserve's interest rate cut may help to boost the US economy, it is also likely to push up inflation in the long run.

Reserve Bank of Australia interest rate expectations

The Reserve Bank of Australia is expected to ease monetary policy at a more cautious pace than the US Federal Reserve, while global growth remains strong. Employment-related indicators in Australia suggest that the RBA should gradually ease monetary policy.

The NAB employment sub-index rose to an 11-month high of 5.2, from 1.9 in July. The Westpac Melbourne Institute's unemployment expectations sub-index rose 4.6 per cent in September, returning to its long-term average, suggesting the labour market is stabilising rather than improving.

Australia's employment data for August will be released on September 18, which will have an impactReserve Bank of Australia interest rate expectationsThe RBA has said that the rate of decline in the cash rate will largely depend on labour market conditions. Meanwhile, the RBA's cash rate futures market still expects a 50 basis point cut in rates over the next 12 months.

technical analysis

(AUD/USD daily chart, source: Internet)

The daily chart shows that the AUD/USD exchange rate has rebounded in recent days, rising from a low of 0.6413 to the current level above 0.6600. The exchange rate has now broken through the important resistance level of 0.6565, which is also the neckline of the "double bottom pattern" formed by the low of 0.6413.

The current AUD/USD exchange rate continues to be above the 50-day average line and the Ichimoku cloud chart. In addition, the Relative Strength Index (RSI) and the Index Smoothing Average of Differences and Differences (MACD) indicators continue to rise.

AUD/USD is approaching the important resistance level of 0.6625 - the highest volatile high of the year and near the upper edge of the upward channel. There is a high probability that AUD/USD will test this resistance level and is expected to rise further to the resistance level of 0.6700.

However, UOB Group FX analysts Quek Ser Leang and Peter Chia pointed out that strong momentum suggests the Aussie may continue to rise, but with a negative divergence forming, any upside movement is unlikely to reach 0.6625. In the long run, the rapid strengthening of upward mobility means that the Aussie may re-test the year's high of 0.6625.

At 18:24 Beijing time, the Australian dollar/US dollar was trading at 0.6617/18, an increase of 0.39%.