AUD/USD Forecast: Upside limited after being unable to hold above 0.6700
Premium|Take advantage of 50% OFF on your first month.
Start your subscription and get access to all our original articles.
You have reached your limit of 5 free articles for this month.
Get Premium without limits for only $9.99 for the first month
Access all our articles, insights, and analysts.
UNLOCK OFFERAUD/USD Current Price: 0.6664
- RBA unexpectedly hikes rates by 25 basis points, focus shifts to the Fed.
- Aussie outperforms after RBA surprise but lags during the American session.
- AUD/USD shows mixed signs after retreating in American hours.
On Tuesday, the AUD/USD pair climbed higher due to the Reserve Bank of Australia's (RBA) unexpected decision. However, as market sentiment worsened during the American session, the pair fell back from its weekly high below 0.6700.
The RBA increased the key interest rate by 25 basis points to 3.85%, surprising market participants who had expected no change. This move caused the Aussie to surge, with AUD/USD hitting its highest level since April 21 at 0.6716. RBA's statement suggested that rates could continue to rise, and Governor Philip Lowe said they would do what is necessary to bring inflation back to target. Friday's Statement on Monetary Policy will offer more clues about the future.
However, despite the decline in US yields, the AUD/USD pair pulled back later as the Greenback regained momentum amid risk aversion. The Aussie lagged during the American session, and AUD/NZD, which had surged to 1.0830, dropped back to 1.0735, the level it had before the RBA decision.
On Wednesday, Australia will report its March Retail Sales with a 0.2% expected gain and the AiG Manufacturing for March and the S&P Global Services PMI for April. Additionally, the New Zealand Q1 Employment report will be relevant. In the US, the focus will be on the Federal Reserve's decision. The ADP private payroll numbers and the S&P Global Services PMI are also due.
Considering the relevance of the economic reports ahead, the FOMC decision, the RBA statement, and NFP, markets will likely remain busy, setting the stage for high volatility.
AUD/USD short-term technical outlook
The failure of AUD/USD to hold above 0.6700 suggests that the pair still needs to be ready for a major rally. However, it did improve the outlook in the short term after breaking above the 0.6645/50 area, which has now become immediate support. Technical indicators are currently favoring a bullish stance but without much conviction. If AUD/USD manages to reclaim 0.6700, it will strengthen the outlook for the bulls, opening the doors to 0.6750.
The daily chart shows the situation is less favorable for the bulls as the price failed to hold above the 20-period Simple Moving Average (SMA) at 0.6680. The price is below key SMAs, and technical indicators are moving around midlines with a slight upward slope.
Support levels: 0.6645 0.6620 0.6580
Resistance levels: 0.6680 0.6705 0.6740
AUD/USD Current Price: 0.6664
- RBA unexpectedly hikes rates by 25 basis points, focus shifts to the Fed.
- Aussie outperforms after RBA surprise but lags during the American session.
- AUD/USD shows mixed signs after retreating in American hours.
On Tuesday, the AUD/USD pair climbed higher due to the Reserve Bank of Australia's (RBA) unexpected decision. However, as market sentiment worsened during the American session, the pair fell back from its weekly high below 0.6700.
The RBA increased the key interest rate by 25 basis points to 3.85%, surprising market participants who had expected no change. This move caused the Aussie to surge, with AUD/USD hitting its highest level since April 21 at 0.6716. RBA's statement suggested that rates could continue to rise, and Governor Philip Lowe said they would do what is necessary to bring inflation back to target. Friday's Statement on Monetary Policy will offer more clues about the future.
However, despite the decline in US yields, the AUD/USD pair pulled back later as the Greenback regained momentum amid risk aversion. The Aussie lagged during the American session, and AUD/NZD, which had surged to 1.0830, dropped back to 1.0735, the level it had before the RBA decision.
On Wednesday, Australia will report its March Retail Sales with a 0.2% expected gain and the AiG Manufacturing for March and the S&P Global Services PMI for April. Additionally, the New Zealand Q1 Employment report will be relevant. In the US, the focus will be on the Federal Reserve's decision. The ADP private payroll numbers and the S&P Global Services PMI are also due.
Considering the relevance of the economic reports ahead, the FOMC decision, the RBA statement, and NFP, markets will likely remain busy, setting the stage for high volatility.
AUD/USD short-term technical outlook
The failure of AUD/USD to hold above 0.6700 suggests that the pair still needs to be ready for a major rally. However, it did improve the outlook in the short term after breaking above the 0.6645/50 area, which has now become immediate support. Technical indicators are currently favoring a bullish stance but without much conviction. If AUD/USD manages to reclaim 0.6700, it will strengthen the outlook for the bulls, opening the doors to 0.6750.
The daily chart shows the situation is less favorable for the bulls as the price failed to hold above the 20-period Simple Moving Average (SMA) at 0.6680. The price is below key SMAs, and technical indicators are moving around midlines with a slight upward slope.
Support levels: 0.6645 0.6620 0.6580
Resistance levels: 0.6680 0.6705 0.6740
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.