AUD/USD: consolidation near 0.7400
Current trend
The Australian dollar updates a two-week high during the Asian session, holding near 0.7425.
Last week, AUD/USD showed one of the most significant gains in the past few months, quickly recouping last Monday's losses that led to new local lows since the end of February. Even the results of the two-day meeting of the US Federal Reserve, where the interest rate was raised by 25 basis points to 0.50%, did not put pressure on the quotes. The regulator's decision marked the launch of a rate adjustment cycle in 2022, which, according to preliminary estimates, could consist of seven rate hikes. In addition, the Fed announced a reduction in its balance sheet, which is currently estimated at nearly 9 trillion dollars, in the next few months.
The rhetoric of US Federal Reserve Chairman Jerome Powell this week, as well as the US President Joe Biden's meeting with North Atlantic Treaty Organization allies to discuss the possibility of a diplomatic solution to the conflict in Ukraine, will be crucial for the short-term dynamics of AUD/USD. In addition, investors will be watching the rhetoric of the People's Bank of China on the interest rate. Today, the country's financial authorities have left the base lending rate at 3.7%, despite the development of the pandemic in the region. Thus, Australia, as a leading exporter to China, may face an increase in buying activity if the local regulator adjusts the figure.
The macroeconomic statistics released on Friday from the US contributed to additional "bullish" dynamics for the Australian dollar. US Existing Home Sales in February showed a decline of 7.2% after rising 6.6% a month earlier, although analysts had expected a decline of 1.0%.
Support and resistance
On the D1 chart Bollinger Bands are trying to reverse horisontally. The price range expands from above, freeing a path to new local highs for the "bulls". MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic, having reached its highs, reversed into a horizontal plane, indicating overbought AUD in the ultra-short term.
Resistance levels: 0.7440, 0.7500, 0.7550, 0.7600.
Support levels: 0.7366, 0.7300, 0.7250, 0.7164.
The Australian dollar updates a two-week high during the Asian session, holding near 0.7425.
Last week, AUD/USD showed one of the most significant gains in the past few months, quickly recouping last Monday's losses that led to new local lows since the end of February. Even the results of the two-day meeting of the US Federal Reserve, where the interest rate was raised by 25 basis points to 0.50%, did not put pressure on the quotes. The regulator's decision marked the launch of a rate adjustment cycle in 2022, which, according to preliminary estimates, could consist of seven rate hikes. In addition, the Fed announced a reduction in its balance sheet, which is currently estimated at nearly 9 trillion dollars, in the next few months.
The rhetoric of US Federal Reserve Chairman Jerome Powell this week, as well as the US President Joe Biden's meeting with North Atlantic Treaty Organization allies to discuss the possibility of a diplomatic solution to the conflict in Ukraine, will be crucial for the short-term dynamics of AUD/USD. In addition, investors will be watching the rhetoric of the People's Bank of China on the interest rate. Today, the country's financial authorities have left the base lending rate at 3.7%, despite the development of the pandemic in the region. Thus, Australia, as a leading exporter to China, may face an increase in buying activity if the local regulator adjusts the figure.
The macroeconomic statistics released on Friday from the US contributed to additional "bullish" dynamics for the Australian dollar. US Existing Home Sales in February showed a decline of 7.2% after rising 6.6% a month earlier, although analysts had expected a decline of 1.0%.
Support and resistance
On the D1 chart Bollinger Bands are trying to reverse horisontally. The price range expands from above, freeing a path to new local highs for the "bulls". MACD indicator is growing, while preserving a rather stable buy signal (located above the signal line). Stochastic, having reached its highs, reversed into a horizontal plane, indicating overbought AUD in the ultra-short term.
Resistance levels: 0.7440, 0.7500, 0.7550, 0.7600.
Support levels: 0.7366, 0.7300, 0.7250, 0.7164.
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