- AUD/USD dipped back below 0.7500 but remains range bound this week as the focus shifts to Friday’s US jobs data.
- The Australian dollar remains resilient against the backdrop of “structurally” higher commodity prices and expectations of a hawkish RBA policy change.
The AUD/USD it fell back below 0.7500 on Thursday, although it remains solidly supported near the big figure and within the rough ranges of 0.7460-0.7540 this week. The pair was little moved by the latest batch of US data which saw inflation (according to the core PCE price index) rise again in February and more evidence of a strong labor market a day before the report was released. US employment official. Despite data and rhetoric from the Fed this week supporting the Fed’s recent hawkish line change this week, month-end/quarter-end selling means the dollar has struggled .
As a result, AUD/USD has been able to hold close to the 0.7500 level this week, with short-term bulls eyeing a test of Q4 2021 highs in the 0.7560 zone. The geographic removal of the Australian economy from the war in Ukraine and positive exposure to the resulting recent sharp rise in commodity prices has been a key tailwind for the Aussie of late, analysts argued. “If we are right, the war leads to a structural rise in energy prices, there is more upside to the AUD this year,” the CBA currency strategists said. “We expect AUD/USD to break above resistance near $0.7516 soon and rally to $0.7673,” they continued.
Such a move may have to wait until after Friday’s official US employment report, as trading conditions ahead of this key data release are typically non-binding. Meanwhile, recent strong Australian data should keep the pair supportive above this week’s mid-0.7400 lows. For reference, new home construction approvals rose 43.5% mom in February, more than recovering from January’s 27.1% mom drop, while data showed job vacancies rose 6.9% in the quarter to February to reach a record 423,500. Recent data supports expectations that the RBA will soon catch up with many of its central bank G10 peers by announcing an aggressive policy change.
Additional technical levels
Source: Fx Street
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