AUD/USD reaches new heights as risk sentiment improves
|The AUD/USD pair has climbed to a new peak, reaching 0.6815, marking the highest level since 28 December of the previous year. This strength in the Australian dollar is partly due to the aggressive rate cuts by the US Federal Reserve, which has spurred expectations that other central banks might also ease monetary policies, enhancing the economic outlook and fuelling a rally in riskier assets.
This week, Australian employment data significantly outperformed expectations, showing a 47.5k increase in jobs for August, far exceeding the forecasted 25.0k. This robust job growth has kept the unemployment rate steady at 4.2%. Despite this positive economic indicator, the main expectation is that the Reserve Bank of Australia (RBA) will maintain its interest rate at the current level in its upcoming meeting, with analysts predicting no changes to monetary policy until at least December and possibly not until Q2 of next year. The RBA’s cautious approach to inflation underscores its strategy of not taking decisive action until there is apparent necessity.
Given the current favourable risk environment, the AUD could reach even higher levels soon.
AUD/USD technical analysis
The AUD/USD market is advancing in the fifth wave of growth towards 0.6855. This target will likely be reached soon, followed by a corrective movement to 0.6790, testing it from above. This could define the upper boundary of a new consolidation range. Should the pair break below this range, a further decline to 0.6736 might ensue, potentially signalling the start of a new downward trend towards 0.6640, with a continuation to 0.6590. The MACD indicator, currently at its highs and directed upwards, supports this bullish scenario in the short term.
On the H1 chart, AUD/USD is forming a growth structure towards 0.6855. A short rise to 0.6848 is expected, followed by a slight decline to 0.6825. Upon completion of this minor correction, another growth phase towards 0.6855 is anticipated, which could exhaust the potential of the current growth wave. The Stochastic oscillator, with its signal line above 50 and pointing upwards, corroborates the likelihood of continued upward movement before any significant pullback.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.