AUD/USD Forecast: Bulls refuse to give up, but can they win?
AUD/USD Current Price: 0.7020
- The RBA Meeting minutes hinted at more aggressive cash rate hikes in the near future.
- Australia will publish on Wednesday the Q1 Wage Price Index, which is foreseen to be up by 2.5% YoY.
- AUD/USD holds on to gains above 0.7000, and may continue advancing in the near term.
The AUD/USD pair regained the 0.7000 threshold and traded as high as 0.7040 on Tuesday, boosted by the Reserve Bank of Australia and a generalized better market mood. The pair retreated during the American session, and following comments from US Federal Reserve Chair Jerome Powell, as his conviction to take down inflation, weighed on Wall Street, which in turn dragged AUD/USD lower. Nevertheless, the pair trades around the 0.7020 level as equities remain in the green.
The RBA released the Minutes of its latest meeting at the beginning of the day, and the document brought some hawkish surprises. The central bank hinted at larger rate hikes in the foreseeable future after raising the cash rate by 15 bps in May. Members agreed that the preferred option was 25 bps, although an increase of 40 bps could be made given the upside risks to inflation and the current very low level of interest rates. Australia will publish on Wednesday the Q1 Wage Price Index, which is foreseen to be up by 2.5% YoY. The improving figure would support the RBA stance and maintain the aussie afloat.
AUD/USD short-term technical outlook
From a technical point of view, the AUD/USD pair has still quite a road ahead before turning bullish. The daily chart shows that the pair is up for a third consecutive day, although technical indicators are losing their positive momentum within negative levels. Meanwhile, the 20 SMA maintains its firmly bearish slope well above the current level and below the longer ones.
The 4-hour chart shows that the pair stalled its recovery around a mildly bearish 100 SMA but also that the 20 SMA gains upward strength below the current level. Technical indicators have retreated from their intraday highs but stabilized well above their midlines, skewing the risk to the upside, particularly if the pair is able to overcome the intraday high.
Support levels: 0.6995 0.9650 0.6920
Resistance levels: 0.7035 0.7070 0.7110
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Author
Valeria Bednarik
FXStreet
Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.
