AUD/USD Forex Signal: Eyes 0.700 After The RBA Decision| MENAFN.COM

Saturday, 25 March 2023 11:01 GMT

AUD/USD Forex Signal: Eyes 0.700 After The RBA Decision

(MENAFN- Daily Forex) Advertisement got a position to try? don't wait! trade aud/usd now Bullish view
  • Buy the aud/usd pair and set a take-profit at 0.700.
  • Add a stop-loss at 0.6895.
  • Timeline: 1 day.
Bearish view
  • Sell the AUD/USD pair and set a take-profit at 0.6895.
  • Add a stop-loss at 0.700.

The AUD/USD drifted upwards on Tuesday after the Reserve Bank of Australia (RBA) made its ninth straight rate hike. It rose to a high of 0.6943, which was slightly higher than this week's low of 0.6860. But it remains much lower than the year-to-date high of 0.7145.RBA rate hike

The RBA continued with its tightening phase on Tuesday as the war on inflation accelerated. As was widely expected, the bank raised interest rates by 0.25% to 3.35%. In a statement, Governor Philip Lowe vowed to continue tightening in the coming months since inflation remains stubbornly high.

The most recent data showed that Australia's inflation jumped to 7.8%, the highest point since 1990. In its statement, the bank expects that prices will drop to about 4.75% this year. At the same time, the unemployment rate is still at 3.50%, the lowest level since 1978.

The decision came a week after the federal reserve also continued hiking rates. It downshifted its rate hike by hiking by 0.25%, bringing the headline rate to between 4.50% and 4.75%. Strong jobs numbers published on Friday mean that the Fed could continue hiking rates for longer than expected.

There will be no other economic data from Australia on Tuesday. Instead, the main mover of the AUD/USD pair will be a speech by Jerome Powell, the Fed chair. In his first statement after the Fed decision, the governor will likely provide more information about the next actions after the strong jobs report. He will likely maintain a hawkish tone considering that bond yields are much lower than their highest points last year.AUD/USD analysis

After falling to a low of 0.6855 on Monday, the Australian dollar quickly made modest gains before and after the RBA decision. It rose above the key resistance at 0.6895 (Friday low). The pair also moved slightly above the 25-period moving average and has retested the lower side of the Ichimoku Cloud.

The AUD to USD pair also retested the important psychological resistance point at 0.6950. Meanwhile, the histogram of the MACD moved above the neutral point while the MACD and signal lines continued rising. Therefore, the outlook of the pair is still bullish, with the next level to watch being at 0.700 (January 31st low).

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