The AUD/USD pair saw a significant increase on Friday, reaching 0.6790 after Federal Reserve Chair Jerome Powell hinted at potential rate cuts. This surge comes as the US Dollar weakens in response to Powell’s speech at the Jackson Hole Symposium.
Despite mixed economic signals from Australia, the Reserve Bank of Australia (RBA) remains cautious due to high inflation levels, supporting the Australian Dollar against the greenback.
Daily Market Summary: Aussie Strengthens on Diverging Monetary Policies
- The RBA’s reluctance to ease monetary policy soon, as revealed in the latest meeting minutes, bolsters the Australian Dollar.
- Inflation projections above the 2-3% target until 2025 suggest interest rates may stay elevated for an extended period.
- RBA Governor Bullock’s statement on no near-term rate cuts further supports the Aussie.
- China’s measures to bolster the housing market offer additional support for the Australian Dollar, despite underlying debt issues.
Technical Analysis: AUD/USD Shows Bullish Momentum
Following a brief consolidation phase, the AUD/USD pair surged to January highs at 0.6790. The Relative Strength Index (RSI) near the overbought threshold at 67, while the Moving Average Convergence Divergence (MACD) indicates rising bullish momentum with increasing green bars.
High volume reflects strong buyer interest, with resistance levels at 0.6800 and 0.6850, and support levels at 0.6700 and 0.6650.
RBA FAQs
The Reserve Bank of Australia (RBA) plays a crucial role in setting interest rates and managing monetary policy to maintain price stability and economic prosperity. Factors such as inflation, macroeconomic data, and tools like QE and QT can impact the value of the Australian Dollar (AUD).