AUD/USD extends gains after aggressive RBA minutes and climbs above 0.7000

  • AUD/USD gains strong positive traction for the third day in a row on Tuesday.
  • Aggressive Reserve Bank of Australia meeting minutes buoy AUD amid USD weakness.
  • Investors are now turning their attention to US retail sales data for a fresh boost ahead of the Fed chair’s speech.

The pair AUD/USD moves steadily higher during the European session on Tuesday and rises back above the 0.7000 level. At time of writing, the pair remains near its daily highs, quoting at 0.7038 and up 0.96% on the day.

A combination of supportive factors helped the AUD/USD pair build on its recent bounce from a nearly two-year low and gain traction for the third day in a row on Tuesday. Reserve Bank of Australia (RBA) monetary policy meeting minutes were a key factor boosting the national currency. Furthermore, the US dollar’s current pullback from its two-decade high offered additional support for the pair.

Australia’s central bank noted that Further interest rate hike still possible in June amid upside risks to inflation. It is worth remembering that Australian inflation in the first quarter increased at its fastest pace in more than 20 years. On the other hand, the good recovery in equity markets led to some profit taking around the safe-haven USD, further benefiting the perceived riskier AUD.

The strong intraday move higher has executed some short-term stop orders placed near 0.7000. Sustained strength and acceptance above that level could have set the stage for further gains. Having said that, A rebound in US Treasury yields should help limit the dollar’s decline ahead of Fed Chairman Jerome Powell’s appearance, later today. This, in turn, warrants some caution before opening new bullish positions on the AUD/USD pair.

The markets seem convinced that the Federal Reserve will have to take more drastic measures to control inflation and have priced in at least a 50 basis point rate hike in the next two meetings. Therefore, Powell’s comments will be closely scrutinized. looking for clues about the possibility of a 75 basis point increase in June. This will influence the short-term USD price dynamics and provide a further directional boost to the AUD/USD pair.

Investors, meanwhile, will be looking to the US economic calendar with the release of monthly retail sales figures. This, along with US bond yields, will influence the dollar price dynamics and provide some momentum to the AUD/USD pair. Additionally, the overall market risk sentiment should allow investors to take advantage of short-term opportunities.

AUD/USD technical levels

AUD/USD

Panorama
Last Price Today 0.7038
Today’s Daily Change 0.0067
Today’s Daily Change % 0.96
Today’s Daily Opening 0.6971
Trends
20 Daily SMA 0.7112
50 Daily SMA 0.7298
100 Daily SMA 0.7245
200 Daily SMA 0.7269
levels
Previous Daily High 0.6983
Previous Daily Minimum 0.6872
Previous Maximum Weekly 0.7074
Previous Weekly Minimum 0.6828
Monthly Prior Maximum 0.7662
Previous Monthly Minimum 0.7054
Daily Fibonacci 38.2% 0.6941
Daily Fibonacci 61.8% 0.6915
Daily Pivot Point S1 0.6901
Daily Pivot Point S2 0.6832
Daily Pivot Point S3 0.6791
Daily Pivot Point R1 0.7012
Daily Pivot Point R2 0.7053
Daily Pivot Point R3 0.7122

Source: Fx Street

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