- In the face of broad-based USD depreciation, hawkish RBA meeting minutes strengthened the Australian dollar.
- The AUD/USD pair renews an intraday high after a three-day rebound from a multi-month low.
- Traders are now looking for new motivation ahead of Fed Chair Powell’s speech.
The AUD/USD forecast remains bullish during the European session as the pair picks up bids to refresh its daily peak around 0.7025.
At the time of writing, the pair is trading at 0.7041.
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On Tuesday, a mix of supportive factors helped the AUD/USD pair build on its recent recovery from a near two-year low and gain momentum for the third day.
The hawkish Reserve Bank of Australia (RBA) monetary policy meeting minutes proved to be crucial for the local currency’s rise.
According to the minutes of the Reserve Bank of Australia’s May monetary policy meeting, members debated hiking the cash rate by 15 basis points, 25 basis points, or 40 basis points.
A goodish rebound in the stock markets, on the other hand, caused some follow-through profit-taking around the safe-haven greenback, benefiting the considered riskier Aussie dollar.
On the other hand, Markets are confident that the Fed will need to take more extreme measures to contain inflation and have completely priced in at least a 50-basis point rate rise at the next two policy meetings.
AUD/USD key events to watch
On the AU docket today, we had RBA Minutes.
We have Retail Sales for April and Powell’s speech on the US calendar.
Powell’s statements will be analyzed for hints regarding the potential of a big 75 basis point hike in June. This will significantly impact the near-term USD price dynamics and offer a new directional push to the AUD/USD pair.
AUD/USD price technical forecast: Edging higher towards 0.7050
The AUD/USD price forecast remains bullish, as the pair has gained 0.93% so far. The pair is now trading at 0.7041.
The 4-hour chart shows bullish momentum. The price is above 20 and 50 SMAs and is drawing near 100 SMA. However, it is below the 200 SMA.
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AUD/USD is now hitting the 0.7041 level. A fall below 0.6901 will bring the pair towards the 0.6832 support level. If the pair dips below this level again, it will challenge the next support level at 0.6791.
On the upside, the pair can go towards the next resistance level, around 0.7053. A break over 0.7076 will pave the door for a test of the following resistance level of 0.7122.
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Saqib Iqbal
