The AUD/USD pair has stayed within a limited range this week amid the ongoing conflict in the Middle East. On Tuesday, it was at 0.7077, experiencing a minor decline from the year-to-date peak of 0.7147. The emphasis will continue to be on the recent developments in the Middle East, the forthcoming US jobs data, and the Australian GDP report. The AUD/USD pair fluctuated as market participants evaluated the recent events in the Middle East, where conflict erupted over the weekend. Following the events, crude oil and petrol prices have persisted in their upward trajectory, a development that could potentially result in increased inflation.
Brent and West Texas Intermediate rose to $78 and $73, respectively, a trend that could persist as Iran has closed the Strait of Hormuz. Natural gas prices experienced an upward trend following the closure of a significant plant in Qatar. The forthcoming Australian GDP report will serve as a significant catalyst for the AUD/USD pair. Economists anticipate that the forthcoming report will indicate an increase in the services PMI, rising from 52.2 in January to 56.3 in February this year. The composite PMI is anticipated to range between 52 and 55.7.
The fourth quarter GDP report will be another crucial data point to monitor. Analysts anticipate that the forthcoming data will indicate an economic expansion of 2.5% in the fourth quarter. An increase in GDP, in conjunction with the latest inflation statistics, will heighten the likelihood of an additional interest rate increase. The AUD/USD pair is expected to respond to the forthcoming Australian employment figures. ADP is set to announce its figures on Wednesday, followed by the Bureau of Labour Statistics which will unveil its report on Friday. The data presented will assist the Federal Reserve in making its decision later this month.
The daily chart indicates that the AUD/USD exchange rate was positioned at 0.7085, slightly beneath the year-to-date peak of 0.7145. The pair continues to trade above the Supertrend indicator. A bullish flag pattern has also been established, consisting of a vertical line and a channel. Consequently, the pair is expected to experience a significant bullish breakout in the near future. A bullish breakout indicates the potential for further gains, possibly reaching the year-to-date high of 0.7145. A breach of that level will indicate further upside, possibly reaching the psychological threshold at 0.7200.