By RoboForex Analytical Department
The AUD/USD pair reached a six-month high of 0.6752, marking its fifth consecutive day of gains. The currency’s strength is largely driven by market expectations that the Reserve Bank of Australia (RBA) might diverge from the global trend of lowering interest rates, raising them in response to escalating inflation pressures. May’s CPI figures have intensified discussions around monetary tightening.
Market sentiment is split between expectations for a rate hike and maintaining the current rates at the RBA’s next meeting in August. High domestic yields draw international capital, boost the Australian dollar, and provide a haven from the political uncertainties in the US and Europe.
Moreover, a weaker US dollar, underscored by unimpressive economic data released on Friday, has also bolstered the AUD. This data reinforced the Federal Reserve’s dovish stance on monetary policy.
Technical analysis of AUD/USD
Free Reports:
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Sign Up for Our Stock Market Newsletter – Get updated on News, Charts & Rankings of Public Companies when you join our Stocks Newsletter
The market has established a broad consolidation pattern centred around 0.6723. Moving forward, there is a potential for an upward movement to 0.6822. Once this level is reached, a retraction to 0.6750 for a retest might occur, followed by a continuation of the upward trajectory towards 0.6858. This bullish outlook is supported by the MACD indicator, with its signal line positioned above zero and trending upwards.
The AUD/USD pair is currently challenging the 0.6757 level, with the potential to extend the rally towards 0.6806. Following this target, a pullback to 0.6757 could occur, setting the stage for another rise to 0.6822. The stochastic oscillator, situated above the 50 mark, suggests an imminent climb to 80, reinforcing the bullish momentum forecasted.
Traders and investors are closely monitoring developments, especially the upcoming RBA meeting, which could significantly influence the direction of the AUD/USD pair.
Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.
- COT Bonds Charts: Speculator Bets led by SOFR 3-Months & 10-Year Bonds Dec 21, 2024
- COT Metals Charts: Speculator Bets led lower by Gold, Copper & Palladium Dec 21, 2024
- COT Soft Commodities Charts: Speculator Bets led by Live Cattle, Lean Hogs & Coffee Dec 21, 2024
- COT Stock Market Charts: Speculator Bets led by S&P500 & Russell-2000 Dec 21, 2024
- Riksbank and Banxico cut interest rates by 0.25%. BoE, Norges Bank, and PBoC left rates unchanged Dec 20, 2024
- Brent Oil Under Pressure Again: USD and China in Focus Dec 20, 2024
- Market round-up: BoE & BoJ hold, Fed delivers ‘hawkish’ cut Dec 19, 2024
- NZD/USD at a New Low: The Problem is the US Dollar and Local GDP Dec 19, 2024
- The Dow Jones has fallen for 9 consecutive trading sessions. Inflationary pressures are easing in Canada. Dec 18, 2024
- Gold Holds Steady as Investors Await Federal Reserve’s Rate Decision Dec 18, 2024
