Australian Dollar closes the week strong helped by a weaker USD and a hawkish RBA
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AUD/USD soared on Friday after Powell’s words at the Jackson Hole Symposium. Powell hinted that the Fed is ready to cut rates. On the other hand, the RBA is comfortable with restrictive rates, which favors the Aussie. AUD/USD rose by more than 1% to 0.6790 in Friday’s session, finding stability around 0.6725. This upward move comes as the US Dollar weakens following Federal Reserve (Fed) Chair Jerome Powell’s speech at the Jackson Hole symposium. Despite mixed economic signals from Australia, the Reserve Bank of Australia’s (RBA) cautious stance due to high inflation continues to support the Australian Dollar. Daily digest market movers: Aussie gains strength on monetary policy divergences Australian Dollar is bolstered by the latest RBA meeting minutes, which reveal a reluctance to ease monetary policy soon. RBA projects inflation to stay above the 2-3% target until the end of 2025, suggesting interest rates may remain elevated for an extended period. Governor Bullock has recently stated that the bank has no plans of cutting in the near term. China’s recent measures to support the housing market are not expected to have a significant impact due to underlying debt issues, but they do offer some additional support for the Australian Dollar, given the close economic ties between Australia and China. Technical analysis: AUD/USD sees rising momentum, might consolidate After briefly consolidating, the AUD/USD rose to highs not seen since January around 0.6790. The Relative Strength Index (RSI) is around 67, indicating that the pair is near the overbought threshold. Meanwhile, the Moving Average Convergence Divergence (MACD) shows rising green bars, suggesting building bullish momentum. Volume has remained high over the past sessions, reflecting strong interest from buyers. Resistance levels to watch include 0.6800 and 0.6850, while support levels are at 0.6700 and 0.6650. RBA FAQs The Reserve Bank of Australia (RBA)…
Filed under: News - @ August 24, 2024 6:13 pm