August 08, 2024 at 08:23AM
The pair is up 0.6% to 0.6559 but the early gains may be one that is fleeting in nature. The overall risk mood is looking rather cautious as we start European morning trade. And if there is a reason for Wall Street to sell off later, it could temper with the optimism in AUD/USD similar to yesterday.
The overnight high touched 0.6574 and was held back by the 50.0 Fib retracement level of the swing lower since last month, seen at 0.6573.
That is the first key resistance point in the pair before the confluence of the key daily moving averages at 0.6594-00.
In case you missed it earlier, RBA governor Bullock was out with some remarks in Asia Pacific trading.
She continued to highlight the upside risks to inflation, reaffirming that the RBA remains ready to hike rates if need be. She also says that inflation is not likely to return to the target band until the end of 2025. In other words, she continues to signal to markets that they are pricing in too quickly rate cuts at the moment.
That said, traders are still pricing in ~25 bps of rate cuts by year-end. That isn’t too much changed from after the dust has settled from the RBA policy decision on Tuesday.
Going back to AUD/USD, the near-term chart suggests that buyers are in control currently. That after the earlier lows were held around the 100-hour moving average at 0.6510 today. The key level is now seen at 0.6514 so that alongside the 200-hour moving average at 0.6523 will provide some minor support on the day.
A break below that and the 0.6500 mark will see sellers regain more control towards the end of the week.
This article was written by Justin Low at www.forexlive.com.
