The Australian Dollar (AUD) is facing a slight decline, hovering around a seven-month high of 0.6798 on Monday. The AUD/USD pair has shown strength due to the positive risk sentiment following the dovish comments from US Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium.
Although the AUD is experiencing a downside, the hawkish stance of the Reserve Bank of Australia (RBA) is expected to provide some support. Recent RBA Minutes indicated that a rate cut is unlikely in the near future. RBA Governor Michele Bullock also mentioned the possibility of raising rates to combat inflation if necessary.
On the other hand, the US Dollar (USD) is weakening as market expectations for a 25 basis points rate cut in September by the Federal Reserve are increasing. Fed Chair Powell’s statement about the need for policy adjustments has further fueled expectations of a rate cut.
Market Analysis: Australian Dollar Faces Pressure Despite RBA’s Hawkish Tone
- Philadelphia Fed President Patrick Harker suggests a methodical approach to interest rate adjustments, hinting at multiple rate cuts in 2024.
- Chicago President Austan Goolsbee notes the success of Fed’s goals and anticipates inflation moving towards the target range.
- US Composite PMI remains above expectations, indicating sustained business growth.
- Judo Bank Composite PMI in Australia shows rapid expansion driven by the services sector.
- FOMC Minutes hint at a likely rate cut in September as inflation cools.
- RBA Minutes reveal considerations of a rate hike, but the decision to maintain rates prevails.
Technical Analysis: Australian Dollar Strengthens Near Seven-Month High
The AUD/USD pair is currently trading around 0.6790, showing a bullish bias on the daily chart within an ascending channel. The RSI indicates strong bullish momentum near the 70 mark.
Resistance levels for the pair are at 0.6798 and 0.6910, while support levels are at 0.6770 and 0.6718. A break above resistance could lead to further gains, while a break below support may weaken the bullish trend.
AUD/USD: Daily Chart
Australian Dollar Price Movement Today
The Australian Dollar has shown mixed performance against major currencies today, with the USD, JPY, and CHF making notable moves. The AUD remains sensitive to market sentiment and economic data.
Understanding the factors influencing the Australian Dollar, such as interest rates, trade balance, and economic indicators, can help investors make informed decisions.
For more insights on the Australian Dollar and its impact on global markets, stay tuned for updates and analysis.