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AUDUSD Market Update

8/25/2022 12:17 PM

The AUD/USD pair shows a short-term uptrend against the background of the closing of part of long positions on the US currency, as traders prepare for the start of the annual symposium of central banks in Jackson Hole and the speech of the Chair of the US Federal Reserve, Jerome Powell, in particular.

In addition, today the markets are waiting for the publication of updated data on the dynamics of the US Gross Domestic Product (GDP) for the second quarter. Forecasts suggest some improvement compared to the previous estimate from –0.9% to –0.8%, which, however, is unlikely to noticeably affect the upcoming decision of the US Federal Reserve on interest rates in September. The American economy shows resilience, and also does not suffer from interruptions in energy supplies as much as the European one. It is possible that this will allow the regulator to maintain a record pace of 75 basis points of rate hikes to further combat high inflation.

In turn, the commodity market with regularly rising prices remains favorable for the Australian currency. Coal companies expect record profits this year, despite a shortage of staff and high inflation. Thus, Whitehaven Coal Ltd., the country's largest independent coal mining company, predicted a profit for fiscal year 2022 of 1.89 billion Australian dollars. Experts are confident that other market participants, such as Coronado Global Resources Inc., Yancoal Australia Ltd. and New Hope Group Co., Ltd. will also correct preliminary profit estimates.

In the D1 chart, Bollinger Bands are reversing horizontally. The price range is almost unchanged, but it remains rather spacious for the current level of activity in the market. MACD has reversed to growth having formed a weak buy signal (located above the signal line). Stochastic grows more actively but is rapidly approaching its highs, which reflects risks of the overbought instrument in the ultra-short term.

Existing long positions should be kept until technical indicators are clarified.

Resistance levels: 0.7000, 0.7050, 0.7107, 0.7150. | Support levels: 0.6950, 0.6900, 0.6854, 0.6800.

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