In Tokyo, the AUDUSD is surging, reaching new highs of 0.6691 after rising from the 0.6660s. Markets are nervous ahead of the Federal Reserve meeting next week. Overnight, the European Central Bank raised interest rates, causing a sell-off in the Euro, which subsequently rebounded and proceeded to press against resistance.
In anticipation of central banks, markets are uneasy this weekend.
Markets remain bumpy as a result of the financial crisis, but there is an undercurrent of risk that is seeping into Friday’s markets, with global shares rising on Thursday on reports that a huge consortium of institutions was injecting funds into US lender First Republic Bank. In addition, the Swiss National Bank stepped in to save Credit Suisse, allaying worries of a global contagion.
Meanwhile, the Federal Reserve raised interest rates by 25 basis points. Although the ECB’s 50 basis point boost, is factored in for next week. The ECB’s rate hike on Thursday, which brought its benchmark rate to 3%, was termed as a “strong choice” by ECB President Christine Lagarde.
“Although the Fed is expected to continue the hike cycle to handle inflation, if necessary, it might slow down or temporarily pause its present balance sheet reduction timetable, as it is doing the opposite of the new bank term funding program ,” Rabobank analysts stated.
Additionally in terms of the Reserve Bank of Australia, markets have nearly factored in the possibility of the central bank raising its 3.6% cash rate at its April meeting, despite the fact that the widespread assumption is that the RBA will raise. Given the tight labor market, at least once more.
| Daily SMA20 | 0.6721 |
| Daily SMA50 | 0.6875 |
| Daily SMA100 | 0.6775 |
| Daily SMA200 | 0.6767 |
AUDUSD Technical Outlook
Moving away from its monthly lows, the AUDUSD pair staged a necessary rebound. Which was restrained by the 0.6660 region. After hours of stabilization in a narrow range, technical indicators are not providing any distinct signals.
The AUDUSD would once again be headed for 0.6600 on a decline below 0.6630. The crucial support zone of 0.6560/80. Which is keeping the pair afloat, is the only significant level below.
The 20-period Simple Moving Average acts as resistance on the 4-hour chart at 0.6660. And challenge of the horizontal and psychological level of 0.6700.The Australian dollar would reclaim a crucial technical level if it maintains above the 0.6705 range.
Support levels: 0.6630 0.6570 0.6530
Resistance levels: 0.6665 0.6695 0.6730
