AUD/USD OUTLOOK
- Hawkish RBA Assembly Minutes.
- China’s COVID standing improves.
- Bullish IG shopper sentiment.
AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP
The Australian greenback gathered momentum in early buying and selling this morning after the Reserve Financial institution of Australia (RBA) launched its assembly minutes highlighting the necessity for extra aggressive tightening measures. The opportunity of a 40bps charge hike was argued throughout the present local weather of rising inflation, tight labor market and comparatively low rates of interest. For the interval ending in December 2022, cash markets are pricing in hikes cumulative to 251bps which trumps even the Fed’s 191bps at this level. Any dovish disappointments from the RBA might considerably hinder the AUD in opposition to the USD.
RBA INTEREST RATE PROBABILITIES
Supply: Refinitiv
The U.S. greenback additionally misplaced traction after the COVID-19 scenario in China recovered, additional supporting the commodity linked AUD. On the financial calendar, U.S. retail gross sales together with Fed Chair Jerome Powell’s speech dominates headlines which can hamper at present’s preliminary features.
AUD/USD ECONOMIC CALENDAR
Supply: DailyFX financial calendar
AUD/USD TECHNICAL ANALYSIS
AUD/USD DAILY CHART
Chart ready by Warren Venketas, IG
As talked about in my earlier AUD/USD evaluation, the bullish divergence incidence has come to fruition. Price motion now holds above the psychological 0.7000 degree however might not be the reversal many bulls are ready for. Warning needs to be noticed throughout this era as fundamentals stay unsure.
Key resistance ranges:
- 0.7100
- 20-day EMA (purple)
Key assist ranges:
IG CLIENT SENTIMENT DATA: BULLISH
IGCS exhibits retail merchants are at present LONG on AUD/USD, with 70% of merchants at present holding lengthy positions (as of this writing). At DailyFX we sometimes take a contrarian view to crowd sentiment nevertheless, latest adjustments in lengthy and quick positioning leads to an upside bias.
Contact and observe Warren on Twitter: @WVenketas
