The AUDUSD gains ground for the sixth consecutive day, reaching a three-week high.
The AUDUSD pair rises for the sixth day in a row and reaches a three-week high during the Asian session. On Monday, with bulls now waiting for a break above the 100-day Simple Moving Average (SMA) before placing further wagers.
The RBA’s hawkish stance supports the Aussie and keeps it strong in the face of a lower USD.
The Australian Dollar (AUD) is still benefiting from the Reserve Bank of Australia’s (RBA) unexpected 25-basis-point interest-rate boost last week. As well as a more hawkish outlook. In addition, the RBA’s Statement of Monetary Policy (SoMP) issued on Friday emphasized that inflation risks were biased to the upside. Furthermore, policymakers warned that additional monetary policy tightening may be necessary to guarantee that inflation returns to goal in a fair period.
This, together with a little decline in the value of the US dollar (USD). Offers additional support to the currency. The major and continues to back the upward trend.
In fact, the USD Index (DXY), which measures the value of the US dollar against a basket of currencies. Is nearing a monthly low, indicating that the Federal Reserve (Fed) is nearing the conclusion of its rate-hiking cycle. Indeed, markets have priced in the potential of a Fed rate drop in the second half of this year, despite signals that the economy is faltering. This, together with concerns about the US banking sector and the debt ceiling, keeps US Treasury bond rates low and weighs on the US dollar.
Meanwhile, the Fed’s dovish views overshadowed the positive US monthly jobs statistics reported on Friday, Which indicated that the economy gained 253K new positions in April. vs the 179K predicted. Furthermore, the unemployment rate unexpectedly fell to 3.4% from 3.5%. While average hourly earnings increased to 4.4% from 4.3%.
The aforementioned favorable fundamental backdrop implies that the AUDUSD pair’s path of least resistance is to the higher. However, optimistic traders may avoid putting aggressive wagers and instead prefer to sit on the sidelines. Ahead of the next US consumer inflation numbers, which are due on Wednesday.
AUDUSD Technical Outlook
Technically, some follow-through purchasing beyond the 100-day SMA. Followed by a break over the 0.6800 level, will be considered as a new trigger for bullish traders, paving the way for greater gains.
The AUDUSD pair may then surge towards the next key obstacle at 0.6840. Before attempting to recapture the 0.6800 round figure for the first time since February 2023.
The upward trend might finally allow spot prices to break through the psychological level of 0.7000, with some intermediate resistance in the 0.6955-0.6960 range.
On the other hand, the 200-day SMA, which is now around 0.6730-0.6725. Appears to be protecting the immediate downside ahead of the 0.6700 barrier.
This is closely followed by the 50-day simple moving average. in the 0.6685 zone, which should serve as a critical decisive point.
Any convincing breach below the latter will invalidate any optimistic outlook and move the short-term bias to bearish traders. The AUDUSD pair may then revert to the 0.6600 round figure on its way to the YTD low. Which is expected to be in the 0.6570-0.6565 range.
