The NFP report for the month of June is due tomorrow and the US dollar is up across the board. The greenback gained in June on the back of a hawkish message from the Fed.
At its last meeting, the Fed suggested that it may hike twice the interest rate in 2023, but the market expected only one hike to be signaled. As such, the dollar bounced, and it did not look back ever since.
Another bullish case for the dollar comes from the inflation front. There is a widening gap between US inflation and other countries in the developed world. In other words, the Fed will be forced to act earlier than planned, whereas other central banks in different jurisdictions do not have this constraint. For example, the annual inflation in the Euro area was released yesterday and it actually declined in June.
AUD/USD Technical Analysis
The technical picture shows a possible head and shoulders formation. The market broke below the neckline, retested it, and was rejected right before the end of the month flows. At this point, bears might want to stay on the short side with a stop at 0.76 and a take-profit level at 0.72 for a nice risk-reward ratio.
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AUD/USD Price Forecast
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