AUD/USD Current Price: 0.6672
- The RBA raised rates again, defying market consensus and sending the Aussie higher.
- Australia is set to release its GDP data on Wednesday.
- The AUD/USD pair surged and tested the 200-day Simple Moving Average.
The AUD/USD rose for the fourth consecutive day and appears poised to continue its upward trend. On Tuesday, the Reserve Bank of Australia (RBA) rate hike boosted the Aussie. Gains were limited during the American session due to risk aversion that supported the US dollar. The pair peaked at 0.6684, the highest level since May 16.
The RBA raised its key interest rate by 25 basis points to 4.1%, repeating its decision from the May meeting. This marks the second consecutive time the RBA exceeded economists' expectations. The central bank remains concerned about inflation, as the Consumer Price Index for April came in at 6.8%, well above the 2-3% target range. The RBA statement suggests that further tightening of monetary policy may be required.
Australian bond yields rose after the decision, as did the Australian Dollar. The AUD/USD pulled back briefly during the European session but then resumed upward movement. The hawkish stance of the RBA is offsetting weak economic data from China and is also benefiting from a weaker US Dollar.
In other news, Australia reported a current account surplus of AUD 12.3 billion in the first quarter, slightly below expectations. Reports also indicated that China had asked large banks to cut deposit rates to boost the economy. On Wednesday, Australia is scheduled to release its Q1 GDP data, which is expected to show a positive growth rate of 2.7% YoY. This is an improvement from the previous quarter's growth rate of 2.4%.
AUD/USD short-term technical outlook
-638216738552732101.png)
The AUD/USD pair is trading almost 200 pips higher than its level a week ago after rising for four consecutive days. Technical indicators on the daily chart are not showing overbought readings, suggesting that further gains over the next sessions are likely. The pair is back above the 20-day Simple Moving Average (SMA) at 0.6610 but is slightly below the 200-SMA, which stands at 0.6690.
On the 4-hour chart, the bias is to the upside in the short term. The Relative Strength Index (RSI) is overbought; the Momentum is slightly pulling back. These suggest that profit-taking or consolidation could take place. However, a break above 0.6675 would clear the way for more gains, with attention turning to the 0.6700/05 area. Risks are tilted to the upside above the 0.6610/20 area (horizontal support and 20-SMA).
Support levels: 0.6640 0.6610 0.6580
Resistance levels: 0.6680 0.6710 0.6745
View Live Chart for the AUD/USD
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
AUD/USD: Extra gains in the pipeline above 0.6520
AUD/USD partially reversed Tuesday’s strong pullback and regained the 0.6500 barrier and beyond in response to the sharp post-FOMC pullback in the Greenback on Wednesday.
EUR/USD meets support around 1.0650
EUR/USD managed to surpass the key 1.0700 barrier in response to the intense retracement in the US Dollar in the wake of the Fed’s interest rate decision and Chair Powell’s press conference.
Gold surpasses $2,300 as Dollar tumbles
The precious metal maintains its constructive stance and trespasses the $2,300 region on Wednesday after the Federal Reserve left its FFTR intact, matching market expectations.
Bitcoin price reclaims $59K as Fed leaves rates unchanged
The market was at the edge of its seat on Wednesday to see whether the US Federal Reserve (Fed) would cut interest rates during the Federal Open Market Committee (FOMC) meeting.
The market welcomes the Fed's statement
The market has welcomed the Fed statement, and the S&P 500 is higher in its aftermath, the dollar is lower and Treasury yields are falling. There is still only one cut priced in by the Fed.