- AUD/USD gained strong positive traction on Friday and climbed to a fresh multi-week high.
- The RBA’s hawkish signal acted as a tailwind for the aussie amid sustained USD selling bias.
- Signs that the Fed could pause the rate hike cycle, the risk-on mood weighed on the buck.
The AUD/USD pair maintained its bid tone through the first half of the European session and was last seen trading near a three-week high, just below mid-0.7100s.
A combination of supporting factors assisted the AUD/USD pair to gain strong positive traction on Friday and breakout through a multi-day-old trading range. The Australian dollar continued drawing support from the Reserve Bank of Australia's hawkish signal that a bigger interest rate hike is still possible in June amid the upside risks to inflation. Apart from this, the prevalent US dollar selling bias provided an additional boost to the major and contributed to the ongoing bullish move.
The FOMC meeting minutes released on Wednesday suggested that the Fed could pause the rate hike cycle after two 50 bps hikes each in June and July amid the worsening economic outlook. The speculations were fueled by Thursday's release of the Prelim US GDP report, which showed that the economy contracted by a 1.5% annualized pace in Q1. This, in turn, dragged the yield on the benchmark 10-year US government bond fell to a six-week low, which, along with the risk-on impulse, weighed heavily on the buck.
Meanwhile, the intraday move up pushed spot prices beyond the 0.7125 supply zone and might have already set the stage for additional gains. Hence, a subsequent strength, towards reclaiming the 0.7200 round-figure mark, now looks like a distinct possibility. The momentum could further get extended to the 100-day SMA, around the 0.7230-0.7235 region. Traders now look to the US Core PCE Price Index - the Fed's preferred inflation gauge - for a fresh impetus later during the early North American session.
Technical levels to watch
|Today last price||0.7142|
|Today Daily Change||0.0043|
|Today Daily Change %||0.61|
|Today daily open||0.7099|
|Previous Daily High||0.711|
|Previous Daily Low||0.7056|
|Previous Weekly High||0.7074|
|Previous Weekly Low||0.6872|
|Previous Monthly High||0.7662|
|Previous Monthly Low||0.7054|
|Daily Fibonacci 38.2%||0.709|
|Daily Fibonacci 61.8%||0.7077|
|Daily Pivot Point S1||0.7067|
|Daily Pivot Point S2||0.7035|
|Daily Pivot Point S3||0.7014|
|Daily Pivot Point R1||0.712|
|Daily Pivot Point R2||0.7142|
|Daily Pivot Point R3||0.7174|
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.