The Australian Dollar (AUD) surged on Wednesday, bolstered by the Reserve Bank of Australia‘s (RBA) decision to maintain its Official Cash Rate (OCR) at 4.35% during its June meeting. This marks the fifth consecutive meeting without a rate change, the longest such period since the rate hike cycle began in May 2022. The RBA underscored economic uncertainty in its statement, noting challenges in achieving target inflation levels amid recent data fluctuations.
Meanwhile, weaker-than-expected US Retail Sales figures for May contributed to speculations of future Federal Reserve (Fed) rate cuts, diminishing the strength of the US Dollar (USD) across global markets.
Trading conditions were influenced by the closure of US markets on Wednesday in observance of Juneteenth National Independence Day. Attention now turns to the upcoming US S&P Global Manufacturing and Services PMI reports, which could sway the USD depending on signals of expanding business activity.
Technical indicators point to a bullish outlook for the AUD/USD pair, which has maintained above the key 100-day Exponential Moving Average (EMA) and formed a symmetrical triangle pattern since May 8. The pair’s positive momentum is supported by the 14-day Relative Strength Index (RSI), currently in bullish territory around 54.0.
Looking ahead, a clear break above the symmetrical triangle’s upper boundary at 0.6670 could pave the way for further gains towards psychological resistance at 0.6700 and potentially to 0.6760, a high observed on January 4. Conversely, downside risks include support levels near 0.6590-0.6600, where the 100-day EMA intersects with the triangle’s lower limit. Further declines could target 0.6510 and 0.6465, corresponding to recent lows from March and May, respectively.
The AUD’s recent strength underscores market sentiment favoring the currency amid RBA policy expectations and US economic data dynamics, shaping current market movements in foreign exchange trading.
Related Topics:
