AUD/USD consolidates RBA-inspired move higher, remains below 0.6950

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  • AUD/USD regains positive traction on Tuesday in reaction to the hawkish outlook from the RBA.
  • A modest USD pullback provides additional momentum and continues to support the pair’s move higher.
  • Aggressive expectations around the Fed could benefit the dollar and limit the rise of the pair.

The pair AUD/USD has moved higher on Tuesday after the Reserve Bank of Australia (RBA) announced its monetary policy decision. The pair maintains its gains during the first half of the European session, currently stands just below the 0.6950 zone and, for now, it appears to have broken a three-day losing streak to hit a one-month low on Monday.

Australian dollar strengthens broadly in reaction to the RBA’s hawkish outlook that further rate hikes will be necessary to ensure inflation returns to target. It is worth mentioning that the Australian central bank raised its cash rate by 25 basis points early this Tuesday to a decade high of 3.35%. Apart from this, modest US dollar weakness acts as a tailwind for the AUD/USD pair.

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Indeed, the DXY dollar index, which measures the performance of the dollar against a basket of currencies, is holding back the strong post-NFP rally and is weighed down by a combination of factors. A softer tone around US Treasury yields, coupled with signs of stability in stock markets, appear to weigh on the safe-haven dollar.. That being said, hawkish expectations around the Fed help limit any significant decline in the dollar.

The monthly US employment data, released last Friday, came in better than expected and highlighted the underlying strength of the labor market. This could allow the US central bank to continue raising interest rates in the future, which in turn favors USD bulls. This, in turn, warrants some caution before confirming that the AUD/USD pair’s recent pullback from its highest since June 2022 hit last week is over.

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No market-relevant economic data will be released in the US on Tuesday. Therefore, attention will remain focused on Fed Chairman Jerome Powell’s speech, which will be closely scrutinized for further clues on the central bank’s future rate hike path. This, in turn, will play a key role in influencing USD price action and provide further impetus to the AUD/USD pair later in the American session.

AUD/USD technical levels


Last price today 0.6942
Today I change daily 0.0057
today’s daily variation 0.83
today’s daily opening 0.6885
daily SMA20 0.7002
daily SMA50 0.6856
daily SMA100 0.6672
daily SMA200 0.681
previous daily high 0.6948
previous daily low 0.6856
Previous Weekly High 0.7158
previous weekly low 0.6919
Previous Monthly High 0.7143
Previous monthly minimum 0.6688
Fibonacci daily 38.2 0.6891
Fibonacci 61.8% daily 0.6913
Daily Pivot Point S1 0.6844
Daily Pivot Point S2 0.6803
Daily Pivot Point S3 0.6751
Daily Pivot Point R1 0.6937
Daily Pivot Point R2 0.6989
Daily Pivot Point R3 0.703

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Source: Fx Street

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