Jump to content

AUD/USD Price Forecast: Hawkish RBA Challenges Raging USD


Recommended Posts

AUD/USD OUTLOOK

  • RBA monetary policy statement overview.
  • Key option expiries later today.
  • IG client sentiment: Mixed.

AUD/USD Price Forecast: Hawkish RBA Challenges Raging USD

AUSTRALIAN DOLLAR FUNDAMENTAL BACKDROP

Earlier this morning the Reserve Bank of Australia (RBA) released its monetary policy statement. Listed below are the important issues addressed by the central bank:

1. Inflation forecasts have been revised higher and is expected to remain elevated above the 2%-3% range.

2. No concern over weakening AUD – trading around similar levels pre-pandemic as well as the start of 2022.

3. Tight labor market with low unemployment levels.

AUSTRALIAN UNEMPLOYMENT RATE

Australian unemployment rate

Source: rba.gov.au

4. Interest rate hikes required to stem inflationary pressures.

5. Decline in Chinese growth forecasts.

Taking into account he points listed above, the Australian dollar has much in the way of upside support locally and should the Chinese economy see a turnaround, the AUD could be a front runner against the U.S. dollar going forward. Few currencies have shown such resiliency against the greenback and even fewer have the solid economic foundations to withstand aggressive rate hikes.

Later today (New York cut), the below option expiries are scheduled with emphasis on the 0.7200 and 0.7300 strikes respectively. This could see AUD strength as markets tend to move toward larger strikes as expiry approaches (rule of thumb).

AUD/USD: 0.7000 (524M), 0.7100 (908M), 0.7200 (972M) and 0.7300 (2.27BLN)

On the economic calendar later today, the NFP release dominates headlines with forecasts expected below the prior March print at 391K. A print in line or below this figure could see the AUD climb higher towards the aforementioned option expiry strike levels.

AUD/USD ECONOMIC CALENDAR

non-farm payroll NFP calendar

Source: DailyFX economic calendar

AUD/USD TECHNICAL ANALYSIS

AUD/USD DAILY CHART

AUD/USD DAILY CHART

Chart prepared by Warren Venketas, IG

Price action on the daily AUD/USD chart above shows bears looking to test the 0.7000 psychological support zone for the third time since December 2021. Short-term this does look probable with the dollar bid and the Chinese economy unlikely to make a swift turnaround. I will be looking for a confirmation break above 0.7183 (61.8% Fibonacci) to rethink the downside bias. If prices approach the 0.7183 resistance zone, this could be a great entry point for bears to re-enter.

Key resistance levels:

Key support levels:

  • 0.7000

 

May 6, 2022 | DailyFX
Warren Venketas, Analyst

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      19,526
    • Total Posts
      86,917
    • Total Members
      68,781
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    TomLeonard20
    Joined 12/08/22 14:39
  • Posts

    • KLA Corp., Elliott Wave Technical Analysis KLA Corp.,(KLAC:NASDAQ): Daily Chart, August 12, 2022,  KLACStock Market Analysis:Looking for further continuation lower into wave c) of {ii}. Wave (b) may not be finished, however I am still looking for further downside after the initial move up we had in a five wave manner. KLAC Elliott Wave count:  Wave c) of {ii}. KLACTrading Strategy: wait for the end of wave {ii} to start building long positions to target ATH. KLAC Technical Indicators:We are above all EMAs which suggests we have resumed the uptrend. We could find support off the 200 EMA. TradingLounge Analyst: Alessio Barretta       KLACorp.,KLAC: 4-hour Chart, August 12 2022,  KLA Corp., Elliott Wave Technical Analysis KLAC Stock Market Analysis: Looking for completion of wave (b) to then resume downside into wave c) which could eveb be traded on short timeframes. KLACElliott Wave count:  Wave c of (b). KLAC Technical Indicators: We are facing resistance off the 20 EMA which could be a sign wave (b) is completed or nearly completed. KLACTrading Strategy: You could either look for shorts into wave c) or/and wait for a larger swing once wave {ii} is finished and target he upside with wave {iii}.
    • Elliott Wave Analysis TradingLounge 3-Daily Chart, 12 August 2022, Monero(XMRUSD) XMRUSD Elliott Wave Technical Analysis Mode: Motive Structure: Impulse Position: Wave I Direction Next higher Degrees: Wave C of Zigzag Details: The sub-wave of the first wave is about to end. Watch out for the reverse in Wave Cancel invalid Level: Monero(XMRUSD) Trading Strategy: The entry price is entering the last wave of the first wave. And it is going up to test resistance at MA50, waiting for a reversal in the second wave to enter the trend again. Monero(XMRUSD) Indicators: MACD and MACD Histogram have a reversal signal in an uptrend. TradingLounge Analyst: Kittiampon Somboonsod Elliott Wave Analysis TradingLounge 4H Chart, 12 August 2022, Monero(XMRUSD) XMRUSD Elliott Wave Technical Analysis Mode: Motive Structure: Impulse Position: Wave ((4)) Direction Next higher Degrees: wave I of C Details: Entering the fifth wave. Watch out for the reverse Wave Cancel invalid Level: Monero(XMRUSD) Trading Strategy: The short-term rise of the fifth wave After the fourth wave The level of the end of the triangle pattern is at The end of wave D, but if the price descends below the end of wave E, it is possible that the fifth wave may end at wave B. Monero(XMRUSD) Technical Indicators: MACD and MACD Histogram continue in the same direction.
    • Hi @ArturG, I added a response on the thread you shared. Effectively, the rule apply to UK clients. You can find the relevant text here:https://www.legislation.gov.uk/eur/2014/1286/body I hope that it helps ! All the best - Arvin
×
×
  • Create New...