AUD/USD – Can Expect a Retest to March Level as the Pair Could Drop Further
Sell Stop : 0.6560
Take Profit: 0.6700
Timeline: 1-2 days
Buy Stop: 0.6750
Take Profit: 0.6850
Stop Loss : 0.6685
The most important news in connection with the Aussie Dollar pair is the RBA decision to take a pause for interest rate hikes that has been going on for a while. There were consecutive rate hikes happening without any pause from last year May. Apparently the Australian economy is experiencing a slowdown due to the high inflation and rapid rate hikes. So, the temporary pause of rate hikes is to give some time for economic recovery.
The pair also reacted to the hawkish comments made by Loretta Mester, the head of Cleveland’s Federal Reserve, who expressed her views on rate hikes by saying she is supportive of it due to the elevated levels of inflation prevailing in the economy. But we can’t really forecast what steps will be taken by the Fed in the next meeting. The Bank has clarified that their decisions will be influenced by the key economic data releases and hence we need to watch out for them as well.
On the charts, there is not much action happening as the pair seemed stuck with a slow upward trend in the past few weeks. The pair also formed an ascending channel pattern in orange colour. We saw the pair shifting to the lower side of the trend on Tuesday. The MACD and signal lines have formed a bearish crossover pattern and the pair is lingering at the 50-period MA as of now. We can expect the pair to retest the March level with a drop, preceding the NFP data release.