AUD/USD Makes an attempt Restoration Above 0.7555

Key Speaking Factors:

• AUD/USD bounces again from FOMC selloff
• Powell returns to bearish rhetoric after markets react to hawkish FOMC

AUD/USD has recovered nicely from the selloff in risk-on currencies on the again of the Fed assembly final week, however the pair is struggling to beat bearish strain at 0.7555. Powell’s assertion to Congress yesterday served to place a dent within the US Greenback’s bullish reversal as his assertion was taken as being dovish as soon as once more.

It might be that the FOMC views the response to their up to date dot plot projections as too hawkish for his or her liking and they’re attempting to heart the rhetoric round transitory inflation as soon as once more. For Powell and Williams the job knowledge continues to be of concern as there appears to be a reluctance to return to work regardless of a big improve in vacancies.

A continued dovish message from the Fed will seemingly underpin AUD/USD efficiency as commodity-linked riskier currencies outperform the US Greenback. My projection on this case can be for the pair to commerce above 0.76 within the coming weeks, seemingly holding to a variety as we noticed again in March and April this yr.

Brief-term momentum is popping bullish however sustainable beneficial properties are questionable in the meanwhile. The 4-hour chart reveals how the previous advances have been corrected and brought again beneath 0.7555 so it is going to be key to see if immediately’s push is ready to maintain above this space. In that case, we might even see improve resistance at 0.7570 earlier than making an attempt to breach the 0.76 line, at which level bullish momentum is prone to construct.

AUD/USD 4-hour chart

Wanting on the transferring averages on the Day by day chart, the shorter time-frames proceed to go decrease while the 200-day SMA is flattening out, which is skewing threat to the draw back within the longer run. This may occasionally appeal to additional promoting strain in an try to carry AUD/USD beneath 0.74. In that case, 0.7341 is an attention-grabbing space the place help may come up, which might be taking the pair to its lowest degree since December 2020.

AUD/USD Day by day Chart

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— Written by Daniela Sabin Hathorn, Market Analyst

Observe Daniela on Twitter @HathornSabin