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Trends & Analysis
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Trends & Analysis
News

Week Ahead Preview: 20th of May

News

Walmart’s stock hits record high on Q1 results

News

Crude oil rises on US supplies, inflation data

News

Another nice quarter for NVIDIA?

News

Alibaba delivers earnings miss, shares slide

News

USD edges lower ahead of key economic reports

Asset Watch

AUD/USD price trades in a trendless move, what is next?

 

Tuesday, November 7, 2023

AUD/USD price news, and analysis

• The Australian dollar falls despite the RBA hawkish tone
• The AUD/USD trades in a sideways move, key levels to watch

 

The Reserve Bank of Australia (RBA) raised interest rates by the expected 25 basis points in its recent meeting, taking them to 4.35%. The Australian dollar initially surged but later retraced its gains, despite the RBA maintaining a hawkish stance. The central bank left the possibility of additional rate increases open and expressed concerns about the sluggish progress in reducing inflation. The RBA hinted that it might take until the end of 2025 for inflation to reach the desired level, indicating that interest rates are likely to stay elevated for an extended period.

Regarding the US dollar, markets eagerly await speeches from Federal Reserve members today. It is anticipated that these speeches will reaffirm the continuation of the current monetary policy throughout 2024, with a potential rate hike before the end of 2023, as suggested by some Federal Reserve officials. However, market sentiment suggests this is improbable, particularly given signs of a weakening US labor market and the increase in long-term US bond yields, which has adverse effects on the housing market.

AUD/USD Price Daily Chart

 

Chart source ADSS Platform

On October 23rd, the AUD/USD corrected higher and created a higher low at 0.6289. later on the pair traded higher on taking profits operations, and this upward movement continued into the previous week, culminating in a daily close above the 50-day simple moving average. This signified a prolonged exit from short positions.

Currently, the price moves within a defined trading zone bounded by 0.6266 – 0.6683. Therefore, a daily close above the high end of the zone suggests that the price could rally toward 0.7003. Nevertheless, the resistance levels situated at 0.6770 and 0.6861 should be monitored.

Conversely, a daily close below the low end of the zone indicates the conclusion of the prevailing sideways trend and a possible start of a downward trend that may prompt prices to slide toward 0.5836. That said, the support levels positioned at 0.6170 and 0.6083 should be kept in focus.


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