AUD outlook and prospects. US dollar in focus. native bond yield flip. The previous week, the Aussie fell from a four-month high.
AUD Key Points and Considerations to Start the week
Following its failure on the upside, the Aussie has reentered a trading range.
With aggressive Fed comments, the US dollar reclaimed the lead.
The weekly graph with the market for bonds may be indicating a certain thing, but the AUD forecast is neutral.
AUD investors not betting on further rate hike in July
Following the Fed’s return to aggressive rhetoric prior week during a moment. Where the national interest rate markets is not anticipating a raise by the RBA in July, the AUD fell from a four-month high.
Although market sentiment anticipates a further fifty basis point increase by year’s end, Raising the desired cash rate to 4.6 percent. The following RBA central bank policy review might not end in a hike of rates.
Every choice moving ahead will be based on the evidence, as several central banks are arguing at the moment. On July 26, Australia’s Q2 CPI is scheduled to be released. But investors will be closely watching it for hints about the RBA’s decisions at its meeting in August.
The ECB Symposium and Bond yields in view
For an agenda at the (ECB) Symposium on Central Banking on Wed, Fed Chair Jerome Powell is scheduled to speak.
The previous week marked the first inversion of the Australian bond yield curve since the GFC. The three-year bond possesses a higher yield over the ten-year note by a factor of five as 5 bps.
The market for bonds infers that an economic downturn may occur at some point in the future as yield curves will flat along with ultimately invert.
Naturally, the RBA is attempting to accomplish so with the goal to control potentially too much price inflation.
RBA’s Governor Philip Lowe has made an effort to provide a strategy for taking the difficult route of keeping inflation in check. And preserving growth in the economy and averting a downturn. The likelihood that this strategy will be carried out successfully is rising, as seen by the bond market.
Given how the scenario in Russia is changing, geopolitics may affect markets this next week. The AUDUSD could get stuck in the conflict and become susceptible should risk perception swings increase.
Technical Perspective of AUDUSD for the New Week
This past week, the AUDUSD duo reached a top just under 69 cents, not distant from the previous top of 0.6920. If the market rally gets up again, these levels may act as barriers. Resistance might be found higher, between the 0.7011 – 0.7030 prior peak periods, And prior to a grouping area between 0.0.7137 to 0.7157 zone.
Before a probable resistance region in the range of 0.6800 – 0.6820, near barrier can be at the break of 0.6710 mark. Support could be found within the boundaries at 0.6574 & 0.6565 or the prior bottom of 0.6458 from the end of May.
Support may be found farther below around the previous bottom of 0.6387 with the close 0.6381 Fib line. The movement through the bottom for 0.6170 to its high of 0.7158. And, is retraced at a rate of 78.6% using the Fib method.
Before a probable barrier zone in the range of 0.6800 – 0.6820, adjacent barrier may exist located at the threshold of 0.6710. Support may be found between the breaks at 0.6574 & 0.6565 and the bottom of 0.6458 from the end of May.
