- AUD/USD holds the higher ground, rising over a big figure on RBA’s hawkish surprise.
- The US dollar eases amid a better market mood, supporting the aussie pair.
- Bull pennant breakout on the 1D chart on Monday justifies the explosion.
AUD/USD is sitting at the highest level since June 2021, eyeing a test of the 0.7650 barrier, as the buying interest around the aussie dollar remains unabated on the RBA’s hawkish pivot.
The RBA, at its April monetary policy meeting, kept the key rate unchanged at 0.10%, as widely expected. But what the trick for aussie bulls was the change in the central bank’s forward guidance, as it dropped its ‘patient’ pledge on the inflation developments, hinting at a potential rate hike in the upcoming meetings.
Further, the Russia-Ukraine crisis-driven surge in oil prices combined with holiday-thinned trading exaggerated the move higher in the major.
Meanwhile, the US dollar trades on the defensive amid a better market mood, despite looming risks of additional Western sanctions and penalties.
Next of relevance for the aussie remains the US ISM Services PMI and Fedspeak while the UN Security Council meeting will be also closely followed.
Technically, AUD/USD has extended the upside breakout from a bull pennant confirmed on Monday.
The pattern got validated after the pair closed Monday above the falling trendline resistance at 0.7519.
AUD/USD: Daily chart
AUD bulls remain poised for the further upside towards 0.7700, although the 14-day Relative Strength Index (RSI) is peeping into the overbought region, warranting caution.
Therefore, a minor pullback cannot be ruled before the major resumes the next uptrend.
Tuesday’s low of 0.7535 could emerge as powerful support, below which the 0.7500 level could be tested should the retracement gain momentum.
AUD/USD: Additional levels to consider
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD slides toward 1.2600 ahead of Bailey's testimony
GBP/USD is seeing a fresh selling wave, approaching 1.2600 n Tuesday. The latest leg down in the pair could be linked to escalating Russia-Ukraine geopolitical tesnions, which lift the safe-haven US Dollar. BoE Governor Bailey's tesitmony awaited.
EUR/USD remains heavy near 1.0550 amid escalating Russia-Ukraine conflict
EUR/USD stays under heavy selling pressure near 1.0550 in Tuesday's European trading. The US Dollar finds fresh haven demand on escalating goeopolitical tensions amid reports that Kremlin is threatening a nuclear response amid Ukraine's use of Western missiles against Russia.
Gold price consolidates intraday gains to one-week high amid mixed cues
Gold price (XAU/USD) trims a part of its modest intraday gains to a one-week top and trades around the $2,620 level during the first half of the European session on Tuesday, still up for the second straight day.
Canada CPI expected to rise 1.9% in October, bolstering BoC to further ease policy
The Canadian Consumer Price Index is seen ticking higher by 1.9% YoY in October. The Bank of Canada has reduced its policy rate by 125 basis points so far this year. The Canadian Dollar navigates multi-year lows against its American counterpart.
The week ahead: Powell stumps the US stock rally as Bitcoin surges, as we wait Nvidia earnings, UK CPI
The mood music is shifting for the Trump trade. Stocks fell sharply at the end of last week, led by big tech. The S&P 500 was down by more than 2% last week, its weakest performance in 2 months, while the Nasdaq was lower by 3%. The market has now given back half of the post-Trump election win gains.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.