The Australian dollar has rebounded on Tuesday after a poor start to the week. In the European session, AUD/USD is trading at 0.6737, up 1.28%.

What goes down … can go right back up. This has been the story early this week for the Australian dollar, which tumbled 1.5% on Monday but has recovered most of those losses today. The Australian dollar was hit hard after a weak retail sales report and widespread unrest in China over the country’s zero-covid policy. The unrest in China has put a damper on risk appetite, as the result is likely to exacerbate supply chain disruptions and dampen domestic spending. Investors may have sensed an opportunity for profit-taking after the massive slide on Monday, which would help explain the rebound today.

Fed members keep up the blitz

The Fed doesn’t hold a policy meeting for another two weeks, but the Fedspeak blitz, which started after the soft US inflation report sent the markets in a tizzy, continued in earnest on Monday. Fed member Bullard said on Monday the markets could be underestimating the likelihood of higher rates and that the Fed funds rate will have to reach the bottom end of the 5%-7% range in order to curb inflation, which has been more persistent than anticipated. Fed member Williams added that the Fed needed to do more work to tame inflation, which is “far too high”. Fed member Brainard, a dove, expressed concern about inflation expectations rising above the Fed’s 2% target. The Fed has been aggressive in telegraphing the markets that its rate cycle is far from over, a message we’re likely to continue to hear in the coming weeks.

AUD/USD technical

  • AUD/USD is testing resistance at 0.6707. The next resistance line is 0.6829.

  • There is support at 0.6633 and 0.6511.

AUDUSD

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.

Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Feed news Join Telegram

Recommended Content


Recommended Content

Editors’ Picks

BOE and ECB policy announcements to rock the markets – LIVE

BOE and ECB policy announcements to rock the markets – LIVE

The Bank of England (BoE) and the European Central Bank (ECB) will be announcing policy decisions on Thursday. BOE Governor Bailey and ECB President Lagarde's comments on the policy outlook will ramp up market volatility following Fed's dovish surprise.

FOLLOW US LIVE

EUR/USD retreats below 1.1000, as ECB decision looms

EUR/USD retreats below 1.1000, as ECB decision looms

EUR/USD is trading in a narrow channel below 1.1000, as buyers stay on the sidelines ahead of the ECB policy decision. The pair is sitting close to the highest level in 10 months, as the US Dollar licks the dovish Fed decision-inflicted wounds. 

EUR/USD News

Gold holds steady near $1,950 as US yields stay calm

Gold holds steady near $1,950 as US yields stay calm

Gold price consolidates Wednesday's impressive gains and moves up and down in a relatively narrow channel slightly above $1,950. Following the post-Fed decline, the 10-year US Treasury bond yield holds steady slightly above 3.4%, limiting XAU/USD's upside.

Gold News

Altcoin ascension: MAGIC, Optimism and Stargate Finance rally 20% after Powell's comments

Altcoin ascension: MAGIC, Optimism and Stargate Finance rally 20% after Powell's comments

MAGIC, Optimism and Stargate Finance have rallied beyond 20% after the US Fed’s policy meeting on Wednesday. The rallies are facing crucial hurdles and could trigger a correction.

Read more

Meta Platforms (META) Stock Earnings and Forecast: Facebook parent rockets 20% afterhours

Meta Platforms (META) Stock Earnings and Forecast: Facebook parent rockets 20% afterhours

Well, well, well. It appears that Facebook and Instagram parent Meta Platforms (META) has duly mended its frayed relationship with Wall Street.

Read more

Majors

Cryptocurrencies

Signatures