AUDUSD has been having a volatile week thus far. After leading losses during the Asian session yesterday, the currency pair is at the top of today’s leaderboard in terms of gains. As of this writing, AUDUSD is trading with a 0.61% profit at 0.6962 after the release of the RBA meeting minutes.
According to the report on the most recent central bank meeting, the effect of the pandemic was not as bad as policymakers had braced for. This was widely regarded as a remark of optimism. It also helped that RBA officials did not seem worried about the recent rise in AUDUSD which could weigh down on exports.
However, the central bank did warn that it stands ready to purchase government bonds again if the economic data warrants it. Additionally, officials provided forward guidance by saying that interest rates will not be hiked until inflation and employment targets are met.
On the daily time frame, it can be seen that AUDUSD has retraced some of its gains back to the 38.2% Fib level (when you draw the Fibonacci retracement tool from the low of May 15 to the high of June 10). If there are enough buyers in the market, we could soon see AUDUSD retet its 10-month highs at 0.7062 where it peaked on June 10.
If there is enough bullish momentum in the market, the next resistance level for the currency pair could be at 0.7270 where it may test the 200 SMA on the weekly time frame,
However, it’s worth noting that on the higher time frame, AUDUSD is still testing resistance at the 100 SMA. If resistance at the indicator holds, it could mean that there are sellers left in the market. The currency pair could then fall to 0.6660 where it may test the lows of August and September 2019 for support.More content