AUD/USD outlook: Australian Dollar rises to three-week high on RBA's hawkish shift
|AUD/USD
Australian dollar rose to three-week high in early Wednesday, after RBA’s surprised by 25 basis points rate hike vs widely expected unchanged policy on today’s meeting.
Australia’s central bank lifted interest rates to 4.1%, the highest in eleven years and said that further rate hikes may be required to push inflation towards target.
Today’s decision was seen as a hawkish shift, after the RBA dropped its statement that medium term inflation expectations remain well anchored, pointing to growing concerns that inflation is still too high, which adds to signals about further hikes, as bets for July hike rose to 60%.
Hawkish RBA lifted the Aussie dollar, extending the latest bull-leg off 0.6458 (May 31 low) into fourth straight day, to crack strong resistances at 0.6680/91 (daily cloud base / Fibo 61.8% of 0.6818/0.6458 / 200DMA).
Offers may emerge at this zone as stochastic is overbought on daily chart and slow bulls for consolidation ahead of push higher, as daily studies are positive, and sentiment improved on RBA’s hawkish turn, while daily cloud shift later this week is also expected to be magnetic.
Broken Fibo 50%, reinforced by daily Kijun-sen (0.6638) should ideally contain and keep bulls firmly in play.
Sustained break of 0.6680/91 pivots to open way for test of targets at 0.6742/46 (daily cloud top / 100DMA) and unmask key resistance at 0.6818 (May 10 top).
Falling 20DMA (0.6611) marks pivotal support and break here would question bulls.
Res: 0.6691; 0.6733; 0.6746; 0.6771.
Sup: 0.6638; 0.6611; 0.6557; 0.6543.
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