- AUD/USD is treading water around 0.6500 after the hawkish RBNZ rate hike.
- USD attempts a tepid recovery, as S&P 500 futures drop 0.50%.
- The aussie’s rejection at the ascending triangle resistance keeps sellers hopeful.
AUD/USD is trading modestly flat around the 0.6500 level, having failed to find acceptance above the 0.6530 barrier once again.
The retreat in the pair could be linked to the AUD/NZD driven sell-off after NZD/USD rallied hard on the Reserve Bank of New Zealand (RBNZ) 50 bps rate hike and hawkish guidance. The RBNZ announcement underscores its monetary policy divergence with the RBA, capping the upside in the aussie pair. The RBA slowed its tightening pace on Tuesday by delivering a smaller-than-expected 25 bps rate increase.
Further, resurgent haven demand for the US dollar amid a mixed market mood also cautions AUD bulls. Despite the risk rally in the Asian stocks, the US S&P 500 futures have turned in the red, dropping 0.52%, as of writing. Markets could be feeling nervous ahead of Wednesday’s US ISM Services PMI and employment data due later this week. Note that the greenback tumbled sharply on Tuesday, in the face of a remarkable decline in the American JOLT job openings data.
From a short-term technical perspective, the pair is unable to cross the horizontal trendline resistance placed around 0.6535 on a daily closing basis, leaving sellers in control.
That said, the 14-day Relative Strength Index (RSI) continues to lurk below the midline, supporting the case for a drop towards the 0.6450 psychological level.
The next downside target is seen at the rising trendline support at 0.6424.
AUD/USD: Daily chart
On the flip side, a firm break above the aforesaid critical resistance at around 0.6535 will validate an ascending triangle breakout.
Bulls will then aim for the downward-sloping 21-Daily Moving Average (DMA) at 0.6628. Ahead of that level, 0.6600 will challenge bearish commitments.
AUD/USD: Additional levels to consider
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