AUD/USD Forecast: Confidence boosted the aussie

Valeria Bednarik FXStreet

AUD/USD Current Price: 0.7281

The Australian employment report is expected to show 37K new jobs added in February.
US Federal Reserve decision kept stocks afloat, providing a boost to AUD/USD.
AUD/USD is technically bullish and could run further up once above 0.7305.

The AUD/USD pair advanced throughout the first half of the day, reaching an intraday high of 0.7274 amid hopes for a peaceful solution to the Russia-Ukraine conflict. The pair stabilized at around 0.7250 ahead of the US Federal Reserve monetary policy decision, later declining to 0.7180, as US indexes trimmed early gains following the US Federal Reserve monetary policy decision.

The central bank hiked its main rate by 0.25% as expected while coming up with quite a hawkish dot-plot, which now sees six more rate hikes for this year. The central bank also announced it would start reducing its balance sheet as soon as next month and upwardly revised its inflation forecasts, expecting supply-chain issues to worsen amid Russia's invasion of Ukraine. The initial reaction was reversed within Chief Jerome Powell's speech, with US stocks recovering their strength and AUD/USD extending its intraday gains to 0.7287.

Australia published the February Westpac Leading Index at the beginning of the day, which came in at -0.16%, while the previous reading was downwardly revised to -0.28%. Early on Thursday, Australia will release its February employment report, expected to announce it has added 37K new job positions in the month. The Unemployment rate is foreseen down to 4.1% from 4.2% in January, while the Participation Rate is expected to have increased from 66.2% to 66.3%.

The employment report can introduce some near-term noise in the pair, but it will likely return to sentiment-related trading in the near term.

AUD/USD short-term technical outlook

The AUD/USD pair is set to continue advancing according to technical readings in the daily chart. The pair has extended its recovery above a flat 20 SMA, currently providing near-term support at around 0.7250. Technical indicators, in the meantime, continue to advance within positive levels after flirting with their midlines earlier in the week.

The 4-hour chart shows that the pair met buyers around a mildly bullish 200 SMA, and that is now surpassing an also flat 100 SMA, in line with more gains ahead. Even further, technical indicators crossed their midlines into positive levels, maintaining their bullish slopes.

Support levels: 0.7245 0.7200 0.7160

Resistance levels: 0.7305 0.7340 0.7380

View Live Chart for the AUD/USD

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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.

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