AUD/USD: RBA raises rates more than expected

AUD/USD could correct to $0.70 despite RBA rate hike

Nevertheless, this higher than expected rate hike does not allow the Australian dollar to gain ground against its American counterpart. AUD/USD has been under pressure since rallying to test a major resistance zone at around $0.7266 which matches the December 2021 and May 2022 high, the 200-day moving average and the passing bearish slant. by the summits of March 2021, May 2021 and March 2022.

The risk/reward ratio favors AUD/USD sellers below this resistance. The AUD/USD could begin a decline and come back to test the symbolic threshold at $0.70 given that the Australian dollar should basically continue to be penalized by the global economic slowdown and by the Fed’s monetary tightening.

However, Friday’s US inflation numbers will be crucial in the near term. Higher than expected inflation figures would reinforce Fed tightening expectations, putting pressure on AUD/USD and vice versa.

The outlook would turn bullish on a bounce above $0.7266. In this case, a continuation of the rise towards the March high of $0.7550 would be expected.

Entry: Sale below $0.72

Stop: $0.7265

Goal: $0.70

Risk/reward ratio: 3

Follow the evolution of the price of AUD/USD with IG.

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