AUD/USD: 200-DMA at 0.7330 to cap the race higher fueled by commodity story – Westpac

The FX market expected little from the Reserve Bank of Australia (RBA) Policy Statement. And that appears to have been the correct stance here. Regarding the AUD/USD pair, the commodity story remains super supportive for the aussie, but the 200-day moving average (DMA) at 0.7330 is set to cap gains.

RBA to be patient as inflation to spike higher on Ukraine

“The RBA did warn that ‘the war in Ukraine is a major new source of uncertainty’ and that ‘the prices of many commodities have increased further due to the war in Ukraine’. However, it also sounded more upbeat on the outlook for the ‘unemployment rate to fall to below 4% later in the year and to remain below 4% next year’ and that ‘the decline in infection rates and high numbers of job vacancies point to a strong bounce-back [in hours worked] over the months ahead’.”

“We tend to see the aussie as being well supported by super strong commodity prices, though likely capped by the 200-DMA up at 0.7330.”

“We still see weakness developing in the AUD into the March Fed lift-off which is now less than 3 weeks away. Bigger picture, we would look to use that weakness as an opportunity to buy for strength later in the year.”