Amid widespread US Dollar weakening and cautious optimism, the AUDUSD picks up bids to renew its intraday high.
The AUDUSD currency pair confirms its intraday high above 0.6765 as we head into Tuesday’s European trading day, supporting the market’s cautious optimism and applauding the rate drop from the Chinese central bank. However, decreasing chances of a hawkish Federal Reserve (Fed) move during the Federal Open Market Committee (FOMC) meeting on Wednesday weigh on the US Dollar and lift market sentiment.
Nevertheless, the Fed Watch Tool from the CME indicates a more than 70% likelihood of the Fed’s inaction on the bulls of AUDUSD. The US is extending its import quota from Xinjiang starting on Monday. According to Reuters, China promises to defend Chinese companies from any US sanctions. Bloomberg recently published prepared remarks from US Treasury Secretary Janet Yellen’s scheduled testimony before the House Financial Services Committee, in which she stated that the World Bank and the International Monetary Fund (IMF) act as crucial checkpoints against opaque, unsustainable lending from other countries, such as China.
Above all, the Reserve Bank of Australia’s (RBA) surprise hawkish stance contrasts with the Fed’s dovish inclination to maintain AUDUSD purchasers’ optimism in the gloomy market before to the important data/events.
The US Consumer Price Index (CPI) statistics for May are due out today, and AUDUSD traders should pay attention to them because the Fed Expectations for the upcoming decision on Wednesday include no change in interest rates. It’s important to note that the market anticipates that the 0.4% Core CPI MoM figure will remain unchanged, as lower numbers could delay concerns about a rate hike in July and prevent the Fed from sounding hawkish.
Technical Examination
The AUDUSD bulls are pointed in the direction of the previous monthly high, which is close to 0.6820, by a daily closing above the four-month-old previous resistance line, which is now immediate support at 0.6735.
